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Think tank says stimulus has provided net for hardest hit Virginians

Rosalind Helderman

The Commonwealth Institute has has released a study showing Virginians received $3 billion in direct aid due to provisions of the federal stimulus act. The report indicates that residents received the most aid in areas of the state hardest hit by the economic recession.

According to the analysis, Virginians received $1.9 billion through the Make Work Pay tax credit, a tax reimbursement for low and middle-income earners. Virginians also received $208 million through a provision of the act that has boosted benefits for those who qualify for food stamps. Another $589 million flowed directly to unemployed residents, though provisions that boosted unemployment benefits by $25 each week and extended the number of weeks the unemployed can receive benefits.

"This report shows the act has helped almost every household in Virginia," said Institute executive director Michael Cassidy. He said providing direct aid to the unemployed, those receiving food stamps and lower-income earners meant giving dollars to residents most likely to quickly spend the money on necessities in their communities, boosting the dollars stimulative impact.

"The mechanisms used to provide direct aid through the Recovery Act were ones that were targeted at people most in need," Cassidy said.

The report also concluded that communities with high unemployment rates received the most per capital aid. In Martinsville, where unemployment has reached 20 percent, the study found the act provided $7.6 million in aid, or $517 per every resident. But they found that every locality received significant dollars. Arlington residents received $75 million; Fairfax residents earned $346 million.

Cassidy said the report is intended to shape public discussion of the stimulus bill, which Republicans say has failed to spur economic recovery. Congress is now debating whether to extend some of the stimulus act's provisions, including the boosts in unemployment benefits. Cassidy said the study shows how residents have benefited from those provisions.

By Rosalind Helderman  |  June 16, 2010; 11:56 AM ET
Categories:  Rosalind Helderman  
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Comments

So, turns out the stimulus is working out pretty well. So why would the senate bail on extending unemployment benefits?
btw, I've been hearing some great job search advice on an internet radio show at www.jobtalkamerica.com

Posted by: kcsam215 | June 16, 2010 3:14 PM | Report abuse

Cash from the stimulous may well have helped some folks short term. The real issue is that the stimulous money does not seem to have had an impact on building an "economic come back" and so as these funds dry up there aren't the jobs to sustain a recovery. Government policies have moved us toward a European type social welfare system to a greater extent than in the past. And yet several European countries are unraveling at the seams. We should remember the old saying about foreigh aid, "you can either give a family a fish to eat or you can teach them how to fish so that they can eat every day." The same is true with our economy: we should be promoting policies that create private sector jobs and not spending money in ways that don't create private sector jobs. The only job cohort that is growing are government jobs. We need to help folks on one hand when hit with a huge recession as we were two years ago, but we also need government policies that grow the economy under a free market set of principals. Otherwise all the money spent will not, in the long run, help us get back to a strong and vibrant economy. Tax rates are ready to explode at the end of the year, a huge new entitlement was passed with health care a few months ago, proposed cap and trade legislation will be a huge hit on our economy. So let's look at the big picture. Stimulous money has not helped build us out of the recession at this point. It has helped those out of work and that is nice. But where is the long term eonomic growth of the privae sector that is needed if we are to avoid becoming merely Eropean-like rather than the strongest economy in the world?

Mike Thompson
Thomas Jefferson Institute for Public Policy

Posted by: mikethompson1 | June 16, 2010 5:49 PM | Report abuse

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