Many American families are already struggling as the recovery falters, and for some the pain will soon get worse. Nearly $2 in every $10 Americans had in their pockets last year came from government subsidies such as jobless benefits, food stamps, and Social Security, reports The New York Times. And at the end of the year some of that money will dry up, as extended unemployment payments and other benefits worth an estimated $37 billion (as per Moody's Analytics) expire. Will that kill what's left of the recovery?
Yes, it could slam the economy: We're draining money from the wallets of millions of Americans precisely when we should be pumping it in, says Steve Benen at Washington Monthly. Families are going to "start losing their buying power, which necessarily means less economic activity and a weaker overall economy." It's preventable — we could extend jobless aid, food stamps, and other hard-times programs, but "Republicans don't want to."
"Anti-stimulative policies to intensify"
Nonsense. This is a drop in the bucket: Calling the loss of $37 billion a "'big hit' to the American economy is absurd," says Ed Morrissey at Hot Air. Our economy amounts to around $14.3 trillion a year, so we're talking about 0.26 percent of our GDP. Losing benefits will indeed be tough for the unemployed individuals who have been receiving these checks. Halting the payments will help the rest of us though, because we're borrowing money to cover these checks, and that kills future growth.
"Will Congress extend jobless benefits again?"
We should borrow now, and cut spending later: Extending these benefits is the smart thing to do, says David Frum at FrumForum. We're "putting purchasing power into the hands of unemployed people who otherwise would see their incomes drop to near nothing." In the long term, we can deal with the deficit by cutting spending, but that can wait. "It's the unemployed who face a ticking clock. Let's address their troubles first."
"Debt talks don't need an ambitious solution"
THE WEEK'S AUDIOPHILE PODCASTS: LISTEN SMARTER
- Why Mitt Romney is perfectly poised for a comeback in 2016
- Why is the West so afraid of Islam?
- 10 things you need to know today: July 31, 2014
- The best places to find love — and lust — according to science
- The mystery behind China's aggressive push into space
- What would a U.S.-Russia war look like?
- Here's the schedule very successful people follow every day
- Why GOP reformers are bound to fail
- This simple hack for slicing cherry tomatoes will astound you
- 7 grammar rules you really should pay attention to
Subscribe to the Week