Average Amount of Assistance Per Un- or Underemployed Individual Younger than 65

Assistance by Another Path

A brief article by Kevin Hassett summarizes a National Bureau of Economic Research paper on “The Expanding Social Safety Net” by Casey Mulligan (available for purchase here) as follows:

It is very easy to believe that overall spending on social programs has increased following the recession, since the program’s automatic stabilizers are always triggered during an economic slump. Mulligan points out that spending increased not only due to the recession, but because the eligibility requirements for most programs were expanded, and their benefits increased. Spending per person has gone up, not just total spending.

It is impossible to deny that spending has increased in both absolute and per-recipient terms.  It is more arguable whether “consumer loan charge-offs” and “home retention actions” ought to be included in the calculation that shows benefits as climbing from $10,000 in 2006 to $15,000 in 2010.  As Hassett points out, the federal government has applied significant pressure on banks to pursue mortgage modifications, which have had the effect of increasing borrowers’ monthly expenses, but that’s not, strictly speaking, an assistance payment.

On the other hand, debt write-offs and other forms of easing the burden on borrowers have surely been in the mix as government officials have negotiated bail outs and other help for financial institutions.  In other words, the larger reason for concern may not be that payments to individuals are growing and going to more people, or even that they’re covering more exigencies, but that the deepening involvement of government in private industry is making it more and more difficult to tell who is forcing whom to give what to whom else.

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