The Least, First

Monte Asbury's blog

Good news about economic stimuli

with 2 comments

I’ve posted a few excerpts about how slow and ineffective tax cuts are as an economic stimulus. But (as the saying goes) any jackass can kick a building down.  What does work?

Beyond the partisan rhetoric, there’s good news.  Here are excerpts from an interview with Mark Zandi, economist with Moody’s Economy.com:

clipped from money.cnn.com

Moody’s study suggests extending unemployment benefits, increasing food stamps fastest ways to stimulate economy.

Lower Wall Street from Under the FDR
Lower Wall Street; Image by SheepGuardingLlama via Flickr

The industry research firm Moody’s Economy.com tracked the potential impact of each stimulus dollar, looking at tax rebates, tax incentives for business, food stamps and expanding unemployment benefits. […]

The report found that “some provide a lot of bang for the buck to the economy. Others … don’t,” said economist Mark Zandi. […]

In findings echoed by other economists and studies, he said the study shows the fastest way to infuse money into the economy is through expanding the food-stamp program. For every dollar spent on that program $1.73 is generated throughout the economy, he said. […]

“If someone who is literally living paycheck to paycheck gets an extra dollar, it’s very likely that they will spend that dollar immediately on whatever they need – groceries, to pay the telephone bill, to pay the electric bill,” he said. […]

blog it

Food stamps. Direct aid to people short on food. Unemployment benefits. And why? Because it will most likely be spent on practical, immediate needs. The kinds of things that we want to be producing.

Now there’s a nexus of moral and economic responsibility than anybody ought to be able to back!

It may be late in the game to impact the first stimulus bill. But hang on to this idea: in all likelihood, this is a recession of several years’ duration, and this is not the last time economic stimuli will be on the table.

Here’s the moral of the story:

Food stamps and unemployment benefits are not only good for people who are struggling. They’re good for the entire economy. They’re good for all of us.


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Written by Monte

February 13, 2009 at 12:57 pm

2 Responses

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  1. Wonderful! Like you, I’m sure, I’m always glad when people find a way to use my posts!

    Monte

    February 20, 2009 at 11:15 am

  2. Kazaart, Monte! I came for the positive outlook, and hyar tiz. Just arguing with a friend about this. He’s gettin’ it in his email in a couple seconds. Thanks.

    99

    February 19, 2009 at 3:24 am


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