A new argument for helping the long-term jobless

Larry Summers, director of the National Economic Council, offers an interesting new argument for why Congress should hurry up and extend unemployment benefits:

Missed unemployment insurance payments since May total over $10 billion – enough to have created 100,000 jobs. An abrupt and premature withdrawal of relief is not only something families cannot afford, it is something that the economy cannot afford at a time when the economy is at a critical juncture.

…unemployment insurance puts money in the pockets of the families most likely to spend the money – which in turn expands the economy and creates jobs. The nonpartisan Congressional Budget Office has identified increased aid to the unemployed as one of the two most cost-effective policy options for increasing economic production and employment.

It’s estimated that 2.5 million Americans have exhausted their unemployment benefits since the end of May.

One Comment

  1. NCDude

    July 14, 2010 at 1:46 pm

    The problem during the Great Depression was high unemployment, because no one had any money to hire anyone else.

    Attempts to balance the budget made things worse in 1937.

    Different era, different circumstances. The problem this time around is out of control federal spending. Businesses will hire people and the economy will begin to recover when taxes and spending are cut.

    Major companies are sitting on $B’s riding out this structural recession brought about by the same people who are spending your tax dollars.

    Banks and Investment firms didn’t deserve a bail out for causing this recession, and future generations of tax payers don’t deserve to get saddled with the debt.

    Reform entitlement spending and the problem is licked. Make people work for a living and quit paying them not to work. The longer we put off cuts in spending and taxes, the more painful this recession is going to become, but spending and taxes will be cut, one way or the other, either by choice, or dire necessity.

    Once spending is under control, we’ll still have the cost of the bailout to address, which is why it should be restrained. Make too much sense? I know!