Tuesday, July 20, 2010

Direct stimulus for the economy

Finally, the Democrats in the Senate have managed to cobble together 60 votes to get out of the limbo of filibuster the bill providing an extension of unemployment benefits for those out of work for six months or more. The bill should now easily pass in the Senate and should be on the President's desk for his signature before the end of the week.

Very soon thereafter the first checks to these long-term unemployed citizens should be in the mail. Soon after that, the proceeds of those checks will be used by these people to pay their bills and to buy things they need for themselves and their families. As the money is passed along to shopkeepers, mortgage-holders, and providers of services, those businesses will be using them to pay their own bills and buy new stock or even hire new employees to handle their increased business. Perhaps some of the new employees who are hired will be some of those long-term unemployed who started the ball rolling by paying bills with their unemployment benefits checks.

And that is the way that the economy gets stimulated - by an infusion of money. Paying unemployment benefits is, in fact, one of the quickest ways to stimulate the economy because the money changes hands almost as soon as it is received. Economists have been pounding on this message for many months now, but Republicans in Congress just won't listen.

Instead, we get statements from their leaders about how the unemployed are being coddled and are lazy and don't want to work and providing them unemployment benefits only encourages them. All but two of the Republicans in the Senate voted against moving this bill forward today.

Let us hope that those who have suffered and who continue to suffer from the stagnant economy will remember the Republican position on this when they head to the polls in November.

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