The lapse in extended unemployment insurance benefits at the end of May has resulted in 2.5 million jobless Americans exhausting their assistance. If we do not reinstate benefits by the end of the month, this number will grow to 3.2 million. These losses are exacting an enormous human toll on families who count on these benefits as they continue to search for jobs.
As the president recently remarked: "Lasting unemployment takes a toll on families, takes a toll on marriages, takes a toll on children. It saps the vitality of communities, especially in places that have seen factories and other anchoring businesses shut their doors. And being unable to find work - being able to provide for your family - that doesn't just affect your economic security, that affects your heart and your soul. It beats you up. It's hard."
It is also bad for the economy. But 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.
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. The economy is finally creating jobs, but not nearly fast enough to close the 8 million-job gap opened by the recession.
Some opponents of providing relief to unemployed families have been making the fallacious claim that unemployment benefits are a cause of the unemployment we are facing today. Some of them have even taken an article I wrote two decades ago, under different economic circumstances, and used excerpts out of context to suggest that I share their view.
This is a misreading both of my research and of the economic situation today.
In an economy that is as demand constrained as ours, whatever small changes in search intensity may be associated with unemployment insurance are not the reason for the persistence of joblessness. With five unemployed Americans seeking work for every job opening available, there can be little doubt that the overwhelming cause of unemployment is not a lack of will among the jobless to find work, but a lack of work opportunities.
Opposing extending unemployment benefits will do nothing to put people back to work. It will not result in an increased number of job openings to apply for. And it will not result in a higher level of employment. What it will do is create a more difficult situation for thousands of families hit hardest by the economic crisis and cut off a powerful channel for spurring economic growth.
That is why President Obama will continue to press Congress to extend unemployment benefits and pass commonsense measures to strengthen our economic recovery - like extending unemployment insurance and COBRA, supporting our clean energy economy, providing aid to state and local governments, and saving the jobs of thousands of teachers.
Lawrence H. Summers is Director of the National Economic Council
"The invisible hand of the market" only functions when there IS a market (aka demand). The policies and influence of Ayn Rand's acolytes, including Dr. Summers, brought the US to disaster, which now necessitates intervention (gasp!).
I could express other opinions on business and economics, having worked in the field in law for many decades now, but I am a female and we all know that us gals are just too stupid to even be considered. So I'll say nothing more.
why is unemployment (caused by the economic disaster) any different?
There is disaster aid for crops,floods, hurricanes.
SBA for businesses affected by a disaster ...
(why wasnt the economic crash a valid reason for SBA to issue disaster funds to Main Street ?)
There are many instances where the Federal Govt. steps in beyond insurance coverage when a disaster is declared.
How can Wall Street receive disaster assistance but not Main Street and the unemployed?
"One of the very difficult parts of the decision I made on the financial crisis was to use hardworking people's money to help prevent there to be a crisis."
George W. Bush - Washington, D.C., Jan. 12, 2009
many of those 'hardworking people' are now unemployed
You don't know what you are talking about. Unemployment comes from a fund established mostly by employers. Employers pay unemployment taxes and not workers. If you lose your job through no fault of your own, or largely through no fault of your own, you are in most cases eligible for unemployment. However, your employer has to pay unemployment taxes and be covered by unemployment insurance that your employer pays into.
True statements. However, the employee actually bears the cost of UI as their pay is reflected as a lower amount to offset what the employer puts in.
So...when you receive UI, you're only getting back a portion of what you had already sacrificed in lower pay.
Any honest HR person will tell you exactly what I have noted.
Well, the working class (99% of us) is comprised of all kinds of people; some who are very smart and educated, and some who aren't educated but also know a fleecing when they see one.
The minute the first multinational outsourced jobs, it should have been tried for treason against U.S. citizens. Politicians and the federal government should be working for us, the American people. To hell with what you call globalization. It's become a world of haves and have nots.
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The President and his entire cabinet must be removed from office, placed in protective custody.
Market forces demand the expansion of hunger, homelessness, foreclosures, bankruptcies, unemployment, loss of health-care, contraction of production, etc; A threat to the population as all out war, a national security crisis exists.
This Administration is set to manage an economic and population contraction policy.
Trillions in bailouts are dedicated to the banker-speculators who speculate with bailout trillions. The market is disintegrating, they cry for more bailouts; demanding your Social Security and Medicare.
The international monetary financier derivative debt based market system is in an uncontrollable, unrelenting, irreversible, accelerating, collapsing operation. It is a killing machine; demanding trillions, contraction of employment / production.
The Administration passes the Big Bank and Derivative Debt Protection Act.
Statecraft demands termination of the monetary system: put the Fed into bankruptcy protection, recover the bailout trillions, banks that qualifyl join the US National Bank under Glass-Steagall standards. Assert the national authority; create the debt capital that refinances the American argo-industrial economy; dedicated to the population's physical economy.
The United States must stabilize itself: end the US submission to Globalization, stop the Perpetual War Policy, reinstate Glass-Steagall in US banking, start the Nuclear Fueled Energy Economy, Expand NASA space programs, Expand Social Security and Medicare, refurbish the life enhancing infrastructure grid.
for more info: www.larouchepac.com
That has got to be one of the most ridiculous things I have ever heard. If a corporation is a person then why aren't CEOs in jail for breaking laws and wrong doing just like any other person would be for breaking the laws. After all, aren't they the representative of the corporation?
The bottom line is if we are going to spend other peoples money for this, we cannot do so if there are no strings attached. The only time anyone should get money from the government is if they have a mental or physical disability that keeps them from working.
2. Rich people do drugs too so we should take away all their money?
3. Almost all of the unemployed were already drug tested by their last employer.
4. It's funded by workers who usually have to work at least 2 years and many 30 or 40 and never applied for the benefits they paid premiums on.
5. Don't know much about history. Are you a Daid Burton fan?
6. It was Reagan who took away the mental or physical disability benefits. Don't know much about history again.