Tuesday, June 23, 2009

Experts say expanding food stamp program helps the economy. Imagine what $125 million in unemployment benefits would have done?

I found this very interesting. According to a Media General News Service story out of Hickory, NC, the Food Assistance/Stamp Program helps generate economic activity.

Some experts think the best way to stimulate the economy is through food assistance money, formerly called food stamps. A recent study by the N.C. Budget and Tax Center supports that theory, estimating the $1.6 billion in food assistance money distributed in North Carolina has resulted in $2.8 billion in economic activity.

“When a person spends food assistance money at a local grocery store, that is a sale the store may not have had otherwise,“ said John Quinterno, research associate at the center. “Then, that money gets turned over several times, generating economic activity. “

“Food stamps are an ideal economic stimulus tool because they are always spent locally and have a widespread ripple effect,“ said Louisa Warren, policy advocate for the North Carolina Justice Center, which houses the Budget and Tax Center.

“Families use food stamps at local grocery stores, and that money is passed on to employees, who spend it in other stores, and suppliers, who use it to pay their workers,“ she said.
Imagine that? A “big government program” that helps the economy. Go figure. If we expanded the Food Stamp program to cover more people and also added in the $125 million in unemployment benefits that would also help part-time employees (not a permanent expansion), just imagine the benefits to the foundation of the economy. Being able to buy food and also clothes. This makes too much since and would prove that progressive economic policies work better than pure free market systems.

Here’s what is truly remarkable:
In an effort to increase economic demand and stimulate the economy, the American Recovery and Reinvestment Act will provide $4 billion nationally in added benefits over the next six months.

The Agriculture Department estimates every dollar in food stamps expands the economy by $1.84.

For the center’s study, Quinterno said they used a more conservative $1.73 for every dollar, with a result of $2.8 billion in economic activity since the beginning of the recession.

So, again, turning down the $125 million to extend unemployment benefits was a bad move on the part of Virginia General Assembly Republicans, specifically House of Delegates Republicans. I am pretty sure that this money would have a similar effect on the economy. Lastly, this is money that every person with a job has paid into the Unemployment Trust Fund. Why shouldn’t they have access to it?

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