Courtesy of AARP:
A new report by the AARP Public Policy Institute, "Social Security's Impact on the National Economy," found that Social Security adds more than $1 trillion to the U.S. economy each year. People who receive Social Security benefits are not saving that money for a rainy day. They're spending it on goods and services — pumping it back into the economy. We have to remember that the typical older American has an income of about $22,000 a year, and Social Security accounts for about half of a typical older family's income.
Businesses use the income to purchase more goods and services, to realize profits and to hire more employees. Those employees, in turn, spend their wages on more goods and services, which creates more spending and income for more people. This creates a powerful multiplier effect that benefits the economy, businesses and workers. In fact, our report found that every dollar in Social Security benefits paid out generates about $2 of total output for the U.S. economy.
In 2012, spending by Social Security beneficiaries, combined with the added spending by businesses, generated roughly $1.5 trillion in total economic output.
This spending in turn supported more than 9 million jobs in the national economy. About 4 million of these jobs were created in just 10 industries. The largest impact was seen in the food services, real estate, health care and retail industries.
Thanks to the benefits provided by Social Security, nearly 21.4 million Americans avoided poverty: 1.1 million children, 5.8 million adults under 65, and 14.5 million adults 65-plus.
Of course despite this the Republicans party has been attempting to undermine Social Security since its very inception. And just like Medicare, and now the Affordable Care Act, these are programs that ultimately benefit not just the individual but also the country at large.
I look forward to the day when a report comes out detailing the incredibly positive benefits that Obamacare has had on the nation. Because eventually you KNOW it's coming.
A good first-cut statement of the principles of macroeconomics. Some other things with good multipliers: Jobs, A higher minimum wage, Transfer ("welfare") payments to the needy. One big thing with a poor multiplier: Tax cuts for the rich !!!
ReplyDeleteWe need some studies that show how much Republican programs drain from the economy. One such bit I read about recently was how much Walmart low pay costs the taxpayers. (maybe you put it on IM, and if so I apologize for overlooking)
ReplyDeleteBut, because Walmart pays such low hourly rates, vast numbers of Walmart employees need public assistance just to survive. And, all that public assistance is paid for by tax payers. The Republicans say they are a drain on the economy, but they are working and trying to get by. Just too poorly paid to do so. Oh, and Yeah, same for fast food jobs. Same problem.
Another example? All the CEO's who move jobs out of the country in the name of Bottom Line. How much of a drain do you suppose all of that has been?
Another example: companies who hire only part-time workers, enough of them to staff full-time operations, so they do not have to pay health care or other benefits. Also staggered hours so it is v hard to schedule a second job. A really good deal for the business, subsidized by the public services the employees need to get by.
DeleteRachel has done similar stories on the impact of food stamps...the economic benefits are huge in a community. But the poor GOP can't see beyond their own stuffed bank accounts and fancy diplomas on the wall. Seems to me the real 'elites' are nowhere near the Democratic Party. Hey Sarah...you're 'elite.' Still stupid, though.
ReplyDeleteI'm surprised they say the multiplier is 2. In my college courses, it was always presented as just shy of 3: I.e., the SS recipient spends 95% of it (5% to savings or otherwise not spent), the 95% also gets spent at a rate of something like 95%, and it happens a third time, That's when they stop counting (re macroeconomics), but of course it keeps getting spent at an ever-declining rate. But the multiplier effect is huge, as id the effect of contraction.
ReplyDeleteAnd the first commenter is so right: If you decrease the income of the 1%ers, their spending does not go down much, if at all. The "trickle down theory" has been discredited (with empirical data) for a long time and from many corners.
GO Social Security! GO more federal spending until the economy improves. Only dopes with an agenda think otherwise.
Hey Sally in MI: "elite and stupid" -- yes, that's a definable group. Not to be confused with "elite because they are smart, educated, articulate." That's another elite group -- much reviled, but we badly need them.
ReplyDeleteBut yes, there's lots of "elite and stupid" around these days. Word-salad people.
The Republicans are NOT the only ones who want to screw SS recipients. President Obama's current budget plan includes chaining SS to the CPI, which would reduce the amount of SS payments to the people who need it most. Yes, you read that right. NO, I am not making this up. A DEMOCRATIC president wants to change the way SS benefits are calculated in order to REDUCE SS payments. And the way it would work, the longer you live, the more adversely it would affect you.
ReplyDeleteI do hope that President Obama has rethought chaining SS to the CPI. It does not sound like something he would do. Also, since this is his last turn, he can do more - and if we can regain the House in 2012, keeping the Senate or strengthening it, he will be in a excellent position to work magic in his last two years. Maybe one payer for all? One can dream.
ReplyDeleteWhen Obamacare kicks in and is fully implemented, even more of those Social Security dollars will be spent in other businesses. A lot of folks on SS need Medicare to get by, when "normal insurance polices" become more affordable, Medicare will follow, be run more efficiently, have more health care choices availble etc.
ReplyDeleteA lot of social programs help the economy. WIC, food stamps, etc.....