Economist: Stimulus Helped Consumer Spending

" all the debate on how many jobs this stimulus package has created what about just the broader economy. Has this stimulus really pulled us out of a recession. According to our next -- some aspects of the stimulus can be called a success joining us is Gary. Bartlett senior fellow at the Brookings institute and Gary talked about the tax cut component of the stimulus packages that really. The only part of it it is really working in your opinion. I think."

" That there's two parts that are working one is. Raising the disposable incomes of American households. Through tax cuts and through benefit increases in the unemployment insurance programs Social Security food stamps. Health insurance for the unemployed. All of those forms. Stimulus spending are helping to hold -- Consumer Spending. One thing that's people talk about is how weak Consumer Spending is the try to imagine how bad it would be. Given how much the wealth American households has fallen and how much their private incomes have song the other part of the stimulus that I think is working. Is all of the money that the federal government is providing to state and locals so that they can maintain their employment. Or. Fails -- fail to raise taxes. To cut their budget deficit so the federal. Transfers to state governments are plugging a huge hole and -- state. Balance sheets."

" Well that's good for the states carries Brian Sullivan is that necessarily keynesian no I mean. Ironically something like food stamps is probably the most wonder watery than better than 121 investment right for every dollar write again did you give somebody. In food stamps they'll spend or about 73. Will go through the system that's a good investment. Overall though are things like filling budget gaps and other projects. Are they good investments because we grew at a 112 billion dollar output from twelve to QD three Q but stimulus was spent a 173 billion indicating to me and never return of only 65 --"

" Well. Look some of the money that is going to you and I in the form of a smaller where holdings from our. Weekly paycheck. Is probably being used by you and I -- Take down our credit card bills or -- to -- bank savings accounts are not all of them the money that goes is tax cuts is immediately. Used to buy things and that. Boost Consumer Spending but a lot of the money that's going to state government site I think you have to be clear on this is preventing. What would otherwise be even bigger cuts. For example higher education spending in K through twelve spending and state Health Department spending in state -- capital. Spending on roads and so on so. I I agree with you that the money that goes to the long term unemployed in the form of unemployment benefits and to indigent families in food stamps. Is translated. Into higher Consumer Spending right away much much faster but let's not to forget that states like California. Would be laying off an awful lot of teachers and state employees were not for the fact the federal government. Has filled a huge. Sparingly and revenue gap -- California's budget. Thanking various good to save Gary Bartlett senior fellow at the Brookings Institution they well."