Stimulus kept Minnesota from falling off a cliff


While some on the rabid right keep insisting that federal recovery spending is stupid, I’ve just found 66,000 reasons why it’s really the smartest public policy in an economic crisis. That’s the number of Minnesotans kept out of poverty by the American Recovery and Reinvestment Act, according to a new report from the Center on Budget and Policy Priorities in Washington. 

The study measured the effects of just seven provisions for increased Social Security, unemployment and food stamp benefits plus low-income tax credits, together accounting for barely one-quarter of the stimulus act outlays. It didn’t include public infrastructure improvements (my favorites) or new federal support for education, health care and housing, all of which have also stirred up economic vitality.

The center’s estimates also took no account of indirect stimulus effects on private-sector employment, which burgeons when low-income people have more money to spend (they usually do it quickly, boosting the economy right away).

But the report also estimated that 293,000 Minnesotans who remained below the poverty line were still better off thanks to the seven stimulus programs. Nationwide, more than 32 million of the poor have benefited in that way, the center said, while 6 million others were lifted out of poverty. I guess that makes 38 million living, breathing reasons why the federal stimulus wasn’t only needed, but also plenty smart.