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Lapsing unemployment benefits threaten US recovery

Unemployment benefits have been a secure life line for many individuals who have lost their jobs and are actively looking for work. Just in time for the holiday season, congress cut off 1.3 million Americans from unemployment benefits. In a time of economic crisis, American citizens are facing one of the toughest job markets in history and this devastating loss of financial security will not only damage the well-being individuals but the US economy as well.

Unemployment insurance cuts predicted to cost the US economy up to 1 billion a week

Cutting spending within the federal government has always been a main component of the republican agenda. The conservative ideology reflects that by cutting off the program, the unemployed will be forced to find work. However, Harvard economist Lawrence Katz, states that it is “fiscally irresponsible” to lapse the program and contests it will have the opposite effect, costing the US economy between 600 million and one billion dollars a week. Research has shown that not only is unemployment insurance considered to be the second most effective economic stimulus, it is known that the long term unemployed spend most of their benefit money on goods and services that go directly back into the economy. By ridding the country of this program the long term cost will affect the tax payers by disconnecting people to the labor market, severely hindering economic growth.

Contrary to the common conservative belief that most of the people seeking unemployment insurance are just looking for a government hand out, unemployment benefits cannot be offered to those who are not actively seeking a job. Jack Reed, a congressman in the state of Rhode Island claims that 49,000 Rhode Island residents who once had decent paying or managerial position jobs had lost their benefits December 28th. Reed has created a bill that would extend the benefits for another three months. If passed in the house and the senate, the bill will help salvage the financial damage that will be done and lead to 200,000 jobs this year.

London B Johnson declared a War on Poverty in the 1960’s, a war that continues to rage on today. It is important for congress to come together for the good of the country in order to get people back on track and the economy in a better shape. Getting rid of this program will mean that only one in four unemployed Americans are receiving unemployment benefits, which is the lowest in nearly half of a century. It is clear that “trickle down” is not an effective economic strategy and it is time we focus on rebuilding our economy from the bottom up. A strong foundation will support a prosperous future for our nation.

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