The national income and product accounts, produced by the Bureau of Economic Analysis (BEA), provide a consistent and comprehensive picture of the nation’s economy; as a result, they provide a useful tool for analyzing the economic effects of recent federal legislation designed to stabilize and stimulate the economy. For example, it’s logical that reduced income tax rates and expanded tax credits lowered personal current tax receipts, but by how much? It makes sense that a reduction in the social security tax rate lowered contributions for government social insurance, but how do you put that reduction in context? Or by how much did federal assistance to states increase over previous periods? BEA’s national accounts can help you find the facts and answer these sorts of questions.
Here’s an easy and interesting example: What government program explains the increase in government social benefits over the course of the recent recession?
Data from the BEA show that total government social benefits, as a share of personal income, increased from 14.2 percent in the first quarter of 2008 to 18.3 percent in the fourth quarter of 2010. That’s a notable increase, but what’s behind those numbers?
One of the driving factors of this increase in social benefits was the increases in unemployment insurance benefits. Those benefits more than tripled – accounting for 17 percent of the increase in government social benefits. That largely reflected an increase in the number of people collecting unemployment benefits, which grew from 3.4 million in January 2008 to 11.1 million in March 2010.
Digging a little deeper, BEA’s data show benefits for different types of unemployment benefits, including the Emergency Unemployment Compensation (EUC) program. That program originally created by the federal government in 2008 and modified several times, most recently by the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, provides up to an additional 53 weeks of unemployment benefits to eligible individuals who had exhausted their 26 weeks of regular unemployment benefits. Take a look at the numbers here on line 11, NIPA tables 3.12 and 3.12U to get a better feel for the facts yourself.
To learn more about this, or to read a detailed description of how the expansion and extension of the EUC program affected the national income and product accounts, or NIPAs, please see Analyzing Federal Programs Using BEA Statistics: A Look at Unemployment Insurance Benefits Payments from BEA’s September 2011 issue of the Survey of Current Business.