Saving the Economy Through More Jobless Benefits, Food Stamps, at the New York Times
Monday’s New York Times front-page story by Motoko Rich, “Economy Faces a Jolt as Benefit Checks Run Out,” portrayed massive government spending on unemployment benefits and food stamps as an economic plus, not a potential drain, warning that cutting that funding would be a drag on the fragile recovery.
An extraordinary amount of personal income is coming directly from the government.
Close to $2 of every $10 that went into Americans’ wallets last year were payments like jobless benefits, food stamps, Social Security and disability, according to an analysis by Moody’s Analytics. In states hit hard by the downturn, like Arizona, Florida, Michigan and Ohio, residents derived even more of their income from the government.
By the end of this year, however, many of those dollars are going to disappear, with the expiration of extended benefits intended to help people cope with the lingering effects of the recession. Moody’s Analytics estimates $37 billion will be drained from the nation’s pocketbooks this year.
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Unless hiring picks up sharply to compensate, economists fear that the lost income will further crimp consumer spending and act as a drag on a recovery that is still quite fragile. Among the other supports that are slipping away are federal aid to the states, the Federal Reserve’s program to pump money into the economy and the payroll tax cut, scheduled to expire at the end of the year.
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Approved by Congress last December, the final extension of jobless benefits -- for a maximum of 99 weeks for each unemployed person -- is scheduled to conclude at the end of this year. A handful of states, like Wisconsin and Arizona, have already cut off weeks 80 through 99 for their residents. Meanwhile, more of the long-term unemployed are bumping up against the 99-week limit.
The Times has pushed warnings on unemployment benefits before, with news reports attacking Florida and Michigan for setting modest limits on continued funding of unemployment benefits. At least Rich briefly documented the free-market view that benefits can reduce incentives to find jobs, albeit in paragraphs 21-24 of the 25-paragraph story.
Some business groups argue that extending unemployment benefits has had deleterious effects on employers and potential workers.
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Some economic studies show that people who collect unemployment benefits are less likely to look for or accept work until their benefits are close to running out.
“Unemployment insurance extends the typical amount of time that people will spend off the job and not looking for work
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Comments
Maybe now they'll start taking those jobs Americans just
Submitted by lsudolemite on Tue, 07/12/2011 - 10:14am.
won't do after nearly 2 years of unemployment checks.
Math has never been a hallmark of the NY Times
Submitted by Galvanic on Tue, 07/12/2011 - 10:25am.
"Moody’s Analytics estimates $37 billion will be drained from the nation’s pocketbooks this year."
So, we take $37 billion from the taxpayers' pocketbooks. We distribute it as unemployment benefits, Social Security, food stamps, etc., where it is spent and returns to the taxpayers' pocketbooks.
Now, if we don't take that $37 billion from the taxpayers' pocketbooks and allow them to keep it, do we not still have $37 billion in the nation's pocketbooks? Am I missing something here?
Alternatively, if we borrow the $37 billion from Chinese pocketbooks, distribute it to social programs as before, with it ultimately ending up in American pocketbooks, don't we end up with $37 billion plus interest in debt to the Chinese pocketbooks?
Maybe Nobel laureate Paul Krugman helped Moody's Analytics with understanding the economics of their claim, which would explain the illogic.
The other day at HEB
Submitted by jon_torlin on Tue, 07/12/2011 - 11:06am.
I was getting some groceries at HEB the other day. When I was in the checkout line, it was 5 people deep, 3 in front of me, and 1 behind me. The three in front of me all paid with food stamps, occasionally putting in some real cash.(what's real cash these days considering the value of the dollar??)
I quietly asked the girl at the cash register how often she sees people coming in to pay with food stamps and she said it's been getting more and more frequent. She said it's getting rare to see a customer pay with a debit card like I did because it means I have money in the bank, but she sees a lot of credit card users too(for those of you in Rio Linda, that's not the same as a debit card).
I might be wrong, but that seems to be a bit alarming to me.
-Jon
Jon
Submitted by ricklail on Tue, 07/12/2011 - 11:34am.
There was a lady in front of me at Wal Mart this AM that pulled out a wad and mean a wad of credit cards to pay for her purchase. She went through many of them before deciding on the one she wanted to use. I have never in my life seen a collection of cards like she had. On top of that she left 2 bottles of wine in the bagging area. I can't got to the store any that I don't see somebody using an EBT card. What pisses me off is that they are not buying food to eat but junk food and drinks. They are not the store brands but the main brands. If I ran the food stamp program all they would be allowed to buy was food only-no junk.
credit cards
Submitted by jon_torlin on Tue, 07/12/2011 - 12:00pm.
I don't remember where it was, but a few days ago from a link on Drudge, I read something about a guy who was using a credit card to pay for his bills and food and etc....just one problem, he didn't have a job, so he said he had to use a credit card.
I hope they aren't handing out credit cards to people who don't have a job because that makes a bad situation FAR worse.
But what I wish was that banks and banking companies would be more restrictive about who gets a credit card. I mean really restrictive. There might be less personal debt if they were.
-Jon
It is true that a weekly
Submitted by Ashrak on Tue, 07/12/2011 - 1:04pm.
It is true that a weekly check, and food aid allowances help people and stimulate the economy. Every dollar spent does stimulate economic activity, after all, that is what economics is.
However, when these things are paid for tax dollars, there is a part of the equation not considered. This money is taking from Peter and given to Paul, which means Peter is no longer using that money to stimulate economic activity with it. Worse yet, when it is leveraged money, interest piles up too.
That means these things may help certain individuals in the moment but they hurt the country as a whole on the economic front for the long term.
Here is the reality. Government was not created to be a charity. Charity is something a free people handle themselves as a matter of their own free will. Twisting government into a forced charity is destroying this country and destroying Liberty itself.
Thats the problem.............
Submitted by OldJarhead77 on Tue, 07/12/2011 - 1:11pm.
Lib-TARD, non thinking, in the tank, butt kissing media expect..... LIKE ALL LIBERALS for the money to MAGICALLY appear on the big money tree in the garden of the Fed to be picked and spent at will by only the LIBTARD president and his lackeys in Congress. (Who act like prison wives and do anything this president says) YOUR RIGHT the money that goes to food stamps and welfare has already come out of MY POCKET! They have NO ability to determine what is fantasy from reality anymore. Its like Global warming the LIBERALS think they can wave a magic wand and all of a sudden all the pollution will disapear, and we won't need oil and there will be 100-1000 different alternatives to the internal combustion engine. Totally void of any reality.