You said you bought index mutual funds and how does that benefit the economy. As the mutual fund grows they buy more stock in the underlying companies which creates buying pressure normally helping to increase the share price which helps the capitalization of the issuing company which in turn helps then in many business related ways.
How does it help the capitalization of the issuing company? They don't see any money from sales of their stock on the secondary market.
Which helps the economy more? Taking my $25,000 in dividends and buying more stock from the secondary market, or me taking that $25,000 and paying local small businesses to remodel my home?