This is a very suspect statement in general. Hoyer is quoting 'some' economists, and they are not specified. Why does it make me think that Paul Krugman is all over this? It sounds just like him.
I disagree with this assertion.
The simulative effect, and it's a long last one at that, is employment for the unemployed. This represents a 'double' gain. Not only does it save the government from continuing to support a formerly unemployed person, it also allows the now employed person to spend far more money than when unemployed. During unemployment many purchases are deferred, and quite rightly so. Newly employed, and all those deferred purchases tend to be made in the following months.
It's very telling that Hoyer and other liberals think this (didn't Pelosi also make this statement?) Why work when you can collect from the government? The government can fund all of this entitlement by tax businesses more, right? They've got all the money, right?
This is not going to lead to a greater country. This will lead to fiscal impolsion. This is a foolish direction, a foolish point of view, and a foolish policy. I mean seriously! They can't seriously think this, can they?
The most worrisome part of the story is this:
We are already at minimal GDP growth, and if we cut 1.3% off of that, what will we be at? 0%? That can't be good for anyone.The Congressional Budget Office (CBO has projected that if the Bush tax cuts are allowed to expire at the end of 2012, coupled with the defense cut sequester, it will lead to a 1.3 percent contraction in GDP after Jan. 1, 2013.
Hoyer: Food Stamps, Unemployment Insurance 2 'Most Stimulative' Things for Economy | CNSNews.com