White House: Unemployment Stimulates the Economy

Katie Pavlich

2/22/2012 1:59:00 PM - Katie Pavlich

White House senior adviser Valerie Jarrett told a group of college students today that unemployment stimulates the economy.

 

 

Sound familiar? Nancy Pelosi feels the same way.

House Speaker Nancy Pelosi Wednesday strongly defended her party's support of the federal food stamp program - a day after former Republican Speaker Newt Gingrich argued that GOP candidates should use the growing number of people on food stamps against Democrats on the campaign trail.

At a press conference in her home town of San Francisco, Pelosi explained that the program's multiplier effect –the amount of money generated in the local economy as the result of the subsidy– far exceeds the nearly $60 billion spent this year by the federal government and is a sure-fire way to stimulate the economy. For every dollar a person receives in food stamps, Pelosi said that $1.79 is put back into the economy. The U.S. Department of Agriculture cites an even higher figure of $1.84.

"It is the biggest bang for the buck when you do food stamps and unemployment insurance. The biggest bang for the buck," she said.

Despite Pelosi's and Jarrett's claims, unemployment doesn't stimulate the economy, but unemployment does stimulate voters.