Give an unemployed person a dollar, and she tends to spend it, because she needs to. (By definition, she has no other source of income.) Give a rich person a dollar via a tax break, she tends to save it. (By definition, she has a lot of other assets.) Mark Zandi, chief economist at Moody’s, has found that $1 in unemployment benefits generates $1.61 in economic activity. (That’s the second most-stimulative form of government spending, behind food stamps.) A dollar in tax cuts—not just to the rich, but to everyone—generates about 32 cents.
It turns out that giving unemployed people a little money is the best way to help get the economy back on track. This is, of course, the exact opposite of what the Republican obstructionists are preaching — that rich people go out and hire when they get the tax cuts they paid for this past election.
I’ve never understood that line of tortured logic. Companies hire when they have a job that needs filled, like when people are out spending on goods and services, not because the people on their corporate boards get a tax break. The fact that Republicans get away with this lie is absurd.