Republicans Attack Unemployment Insurance: News of the Day

Earlier this month, Republicans turned their backs on hard-working Americans and their families when they voted to block a modest three-month extension of emergency unemployment benefits. As a result, up to two million unemployed workers will lose this lifeline beginning this week.

While nothing can take the place of a good-paying job, ensuring that families have food on the table and a roof over their heads during the holiday season is the decent and right thing to do. 

Appearing on Morning Joe today, Republican Congressman John Shadegg of Arizona disagreed emphatically that unemployment insurance benefits do not provide an immediate benefit to the economy. 

Mike Barnicle: What about the fact that unemployment benefits pumped into the economy are an immediate benefit to the economy. Immediate. 

John Shadegg: No, they're not.


Mike Barnicle: Let's go back to what you said about unemployment checks. Unemployment checks, people don't spend that money?

John Shadegg: No. they will spend as little as they can because they'll hold on to it as long as they can. In reality, they don't create jobs.

In this case, Morning Joe’s Mike Barnicle is backed up by private economists of every stripe and the Congressional Budget Office.

    • “Households receiving unemployment benefits tend to spend the additional benefits quickly, making this option both timely and cost-effective in spurring economic activity and employment.” -- CBO Director Douglas W. Elmendorf, statement for the Joint Economic Committee, February 23, 2010. 
    • “No form of the fiscal stimulus has proved more effective during the past two years than emergency UI benefits, providing a bang for the buck of 1.61—that is, for every $1 in UI benefits, GDP one year later is increased by an estimated $1.61.” -- Chief Economist of Moody’s Analytics Mark Zandi, testimony before the Senate Finance Committee, April 14, 2010.

Meanwhile, in a Sept. 2010 National Federal of Independent Business survey, small business owners said their “single biggest problem” is lack of sales. In other words, jobs can’t be created without consumer spending – and consumer spending increases when out-of-work Americans receive unemployment insurance benefits.  


 

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