There was an article on the Huffington Post site on 12/3/2013 concerning a statement by the Congressional Budget Office in which the CBO stated that by extending unemployment benefits there would be a boost to the economy of 200,000 jobs. The CBO stated “Recipients of the additional benefits would increase their spending on consumer goods and services,” the CBO said. “That increase in aggregate demand would encourage businesses to boost production and hire more workers than they otherwise would, particularlygiven the expected slack in the capital and labor markets.” Later in the article it states “The CBO says that despite the short-term boost to the economy, the cost of the benefits would add to the federal debt and eventually
reduce economic growth. The budget office also expects that the extended duration of benefits would reduce the intensity of someworkers’ job searches, although some recent research has suggested extended compensation doesn’t turn the jobless into slackers.”
I for one do not understand the CBOs thought process. When I was laid off and taking unemployment for the first time, I did not have the money to spend on consumer goods and services. I was more focused on budgeting my unemployment checks to pay for food, housing, utilities, necessities not consumer goods and services. If unemployed people actually need the unemployment benefits extended, then I do not understand how more jobs are going to saved or created when people are receiving unemployment checks that are usually a quarter of the compensation they had earned while employed. Those unemployed will not have the excess income to spend on consumer goods and services.
I understand that there is still a large number of unemployed in this country and we as Americans can not just cut them off without support, however, how are the Democrats planning to fund the additional expense? My fear is that the Government is going to borrow more money to support the extension and now we are further in debt with no budget deal on the horizon and there is still the situation with the “Un”Affordable Health Care Act as to how the insurance subsidies will be paid for. There will probably be more taxes levied on the working American citizen by the government to try and cover these added expenses, when what is needed is for internal job growth in America