The Hidden Economy

      The underground economy involves the exchange of goods and services which are hidden from official view. Examples of such activities range from babysitting “off the books” to selling narcotics. To the worker it is beneficial because it is not on the books they do not have to pay taxes to the government and thus any money they make they get to keep. Also these people having essentially more money because it is not taxed can lead to an increase in the purchasing of goods and services thus stimulating the economy. This hidden economy can also be bad. The first is that it causes the government to loss money so they increase taxes to make up for the money lost in the hidden economy. Those who participate in the hidden economy don't receive social security and health benefits for the tasks they are doing.