re: Obama: Extending Unemployment Benefits “Creates New Jobs”

quote:

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Every single dollar that goes to unemployment benefits was taken out of the economy in the first place.

-1+1=0.

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All dollars are not the same. An extra dollar in the hands of a poor man will get put right back into the economy. The movement of money is what creates value and jobs.

It's a really simple concept, and the effect is similar to just adding or subtracting people (customers). If we were to lose 10% of the population, that would quite obviously lower demand for consumer goods, and in turn lower the need for production and jobs. The reverse is also true. If we increase the number of people with money in their pockets by 10%, there will be a corresponding increase in demand for consumer goods, so production and jobs will increase accordingly.

Obviously, a huge economy is much more complex than this, but there is no escaping the simple truth that more customers leads to more production and more jobs, not the other way around.