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The Obama administration believes that people did spend the money, and cites analyses calling the cut one of the more effective forms of stimulus.
In addition to unemployment pay, the most effective forms of stimulus are bolstered food stamps and federal aid to states and cities so that they can continue to provide health care and other services.
Republicans worry that it prolongs joblessness and say it has not kept the unemployment rate down, while Democrats argue that those out of work have few alternatives and that the checks are one of the most effective forms of stimulus, since most of it is spent immediately.
While the country has experienced an almost unprecedented economic downturn this year, one of the most effective forms of stimulus has been unemployment benefits.
Similar(56)
History has shown that state aid, which prevents layoffs of teachers, emergency medical technicians and other workers, is the single most effective form of stimulus.
If Congress passes a longer-term extension and adds some measures — like more aid to struggling states, maybe the single most effective form of stimulus — it can offset the winding down of other government programs.
Nick Rowe once beautifully illustrated the flaw in the theory that public works projects, no matter how useless (such as digging holes and filling them in) were an effective form of stimulus in a liqudity trap.
Jason Furman, the deputy director of the National Economic Council, said the administration still believes that changing the withholdings was a more effective form of stimulus than sending out rebate checks would have been.
In fact, the Congressional Budget Office says that aid to the unemployed is one of the most effective forms of economic stimulus, as measured by jobs created per dollar of outlay.
Economists have found that SNAP is one of the most effective forms of economic stimulus, especially in a weak economy.
But economists have come to a consensus that one-time rebates are not a very efficient form of stimulus.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com