Too Much Government Spending? Tell It to These People

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JONATHAN COHN SEPTEMBER 16, 2010

Too Much Government Spending? Tell It to These People

The new income statistics from the Census Bureau paint a grim picture, with 43.6 million people living in poverty. But it could be a lot worse. According to analysis from the Center on Budget and Policy Priorities, extensions of unemployment insurance kept an additional 3.3 million jobless people from falling into poverty. The Center's Arloc Sherman explains:

Total unemployment benefit payments increased by fully $78 billion (154 percent) in 2009, reflecting both a massive influx of laid-off workers qualifying for help and temporary changes made to the program in the 2009 Recovery Act and other legislation. The Recovery Act raised jobless benefits by $25 per week (the increase expired June 2) and, together with other legislation, gave additional weeks of benefits to long-term jobless workers.

And that actually understates the extent to which government kept people out of poverty during the recession. Census income figures don't include refundable tax credits and food stamps, both of which the Recovery Act bolstered. The Center on Budget estimates that accounting for those programs would have reduced the poverty ranks by a few million more, although it's hard to calculate a precise figure right now.

In other words, the income picture is actually a bit less grim than the official income statistics suggest. And it's because of all that dreaded government spending.

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