Another op-ed in today’s Metro NY that’s somewhat akin to what I wrote for them – it’s not my headline, I know that the economic term “leakage” is a phenomenon and not a quantity of money, and the only time I’d use the word “Gotham” to refer to New York City is if I were covering Batman’s policy positions. (Tough on crime, light on inheritance taxes, I’m guessing.) My editing kvetches aside, though, the topic at hand is an important one: How spending money on the poor gets short shrift as a way of helping the economy.
If you’ve been following the debate in Washington over how to best kick-start the economy, you may have noticed an interesting twist. Along with the usual minutiae about which businesses should get to depreciate what, Congress has been consumed by a debate over whether to increase food stamps and unemployment insurance – not just to help the needy in lean times, but to help the country as a whole.
The issue first arose when the Congressional Budget Office declared that boosting benefits for the poor and unemployed was the quickest way to inject cash into the economy. Then Moody’s economist Mark Zandi – hardly a bleeding heart – said the best “bang for the buck” would be boosting food stamps, generating $1.73 in economic activity for every dollar spent. As a comparison, tax breaks for companies buying new equipment would produce only 33 cents… [read more]