"Unemployment benefits help drive the economy because the jobless tend to spend every dollar they get, pumping cash into businesses. A cut-off of aid for millions of people unemployed for more than six months could squeeze a fragile economy, analysts say. Among the consequences they envision over the next year:
-- Annual economic growth could fall by one half to nearly 1 percentage point.
-- Up to 1 million more people could lose their jobs.
-- Hundreds of thousands would fall into poverty.
"Look for homelessness to rise and food lines to get longer as we approach Christmas if the situation can't be resolved," says Diane Swonk, chief economist at Mesirow Financial."
http://finance.yahoo.com/news/Cutof...0.html?x=0&sec=topStories&pos=4&asset=&ccode=
this is a fallacious nonsense that giving money to non productive people helps the economy. no business will make investments based upon the general public receiving the = of welfare benefits.
businesses know that in order to pay these benefits that it is going to come out of taxing businesses and their owners while the currency is being constantly debased and new regulations are being heaped on their businesses.
it has been tried in every country particularly in South America. It has always been a failed policy.
