From ThinkProgress, “Rep. John Shadegg (R-AZ) scoffed at the notion that unemployment benefits help the economy”.
Shadegg is of the opinion the unemployed will spend as little of the money as possible, hoard it like mice storing up for winter. Unemployment pays a return of $1.64 for every dollar paid out.
According to calculations by the Congressional Budget Office, Moody’s Economy, and myriad other economists, unemployment benefits are the single best way to pump money into the economy and generate economic activity, as the unemployed are very likely to spend all of the benefits they receive (thus moving money into local businesses).
Cutting off jobless benefits is proven to lower economic growth.
Unemployment benefits help drive the economy because the jobless tend to spend every dollar they get, pumping cash into businesses. A cut-off of aid for millions of people jobless for more than six months could squeeze a fragile economy, analysts say. Among the consequences they envision over the next year:
– Annual economic growth could fall by one half to nearly 1 percentage point.
– Up to 1 million more people could lose their jobs.
– Hundreds of thousands would fall into poverty.
“Look for homelessness to rise and food lines to get longer as we approach Christmas if the situation can’t be resolved,” says Diane Swonk, chief economist at Mesirow Financial.
Read more: http://www.kansascity.com/2010/11/30/2483561/cut-off-of-jobless-aid-would-lower.html#ixzz16mvWe500
Watch this, Shadegg will be gone in January, hopefully that will be soon enough.
