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.