Population Statistic: Read. React. Repeat.
Wednesday, January 30, 2021

As the Federal government strains to deliver an economic stimulus package that would net average taxpayers some $600 in intended extra spending money, Economy.com argues that pumping up more traditional welfare-state programs would be more effective more quickly.

In findings echoed by other economists and studies, [economist Mark Zandi] 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…

Tracking that single dollar spent through the economic chain shows what economists call the ripple effect, Zandi said. For example, that dollar spent at the grocery store in turn helps to pay the salaries of the grocery clerks, pays the truckers who haul the food and produce cross-country, and finally goes to the farmer who grows the crops.

The report pointed to expanding unemployment benefits as the program that gets the next biggest bang for the buck. That’s because, although the unemployed are already getting checks, they need to spend the money. For every dollar spent here, the economy would see a return of $1.64, Zandi said.

These are very much bottom-up methods of juicing the economy: Spur more necessary spending among the huge mass of have-nots, and the ripple effect will be substantial. The real question is if that effect will be sustainable.

It makes more sense to me than that one-time $600 bonus, which to me is a ridiculous proposition for kickstarting a wave of economic activity. What does 600 bucks represent for middle and upper class households — a weekend or two of fun-money spending? It’s a laughable token giveback.

by Costa Tsiokos, Wed 01/30/2008 11:01:55 PM
Category: Business, Politics, Society
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  1. What bothers me is where is all this money going to come from? $600 x 150,000,000 (assuming half the population will get rebates) is 90 billion dollars. Somehow I think there could be better ways of spending that much money. And where are we going to get that money? Which programs suffer if we take it out of existing budget? Or if new, do we finance it with more debt to China?

    Sorry, but this whole rebate thing is immensely frustrating. For me.

    Comment by douglas.nerad — 02/01/2021 @ 03:37:21 AM


    I’ve been a bit skeptical about the Federal tax rebate/economic stimulus scheme, figuring that $600 per adult head really wouldn’t go that far in juicing the body politic’s financial well-being.
    And the spending spree results submitte…

    Trackback by Population Statistic — 05/25/2008 @ 07:25:47 PM

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