Reply #15: it is supposed to have a multiplier effect, for one [View All]

[hfojvt]

logically, if 5,000 people in this town get $500 that is $2.5 million dollars. A certain percentage of that money will be spent. Maybe I will buy one of those chess sets for $90. Maybe somebody else will buy a new chair. Even if only half of it is spent, that provides income of $1 million to other people who then go out and spend that income. The spending and purchasing might mean that the chair factory is still selling chairs and does not need to close. It means the restaurant does not have to cut hours.

Granted, it may not be as huge as a $50 million road project that creates construction jobs for a year or two, but it is something. It does little to help somebody who has lost a job, but the extra spending is supposed to have a positive ripple that keeps even more people from losing jobs.