http://www.theguardian.com/business/201 ... efits-cuts

I'd hate to rely on those sort of figures, but that's properly messed up.

So the economy is losing $1b a week, but presumably that means the governemnt is saving $1b a week in payouts?

It's more the knock-on effect of not having any money to spend in the wider economy, apparently.

It's based on the fact that these benefits are spent, locally and immediately, and the money will therefore circulate quickly. Unlike say a tax cut some of which will be saved, and will therefore circulate less quickly. It's that circulation that is being used to factor it up from $400m (which is what the govt. saves) to the billion that it costs the economy.

GDP calculations are based on what is effectively effectively the same money, just going round and round ever more quickly.

They might only save $600 million a week because of the multiplier effect of benefits. Also the real figure for US unemployment is considerably higher. The falls in unemployment has been mainly because people have fallen off the register and are no longer looking for work after two years. It also does not count the numbers who are working part time but really want to get back into full time employment. If you use the U6 measure which includes underemployed and those who have given up looking but want a job then unemployment is 13.2%. In the UK you would need to add back all those on zero hour contracts to get an equivalent rate for here.