As much heat as President Obama faces from the left — some of it deserved, some of it not — I sometimes think congressional Democrats get let off too easy. It’d be easier for the White House to do the right thing were it not for congressional Dems who think they’d be better off doing the wrong thing.
President Barack Obama is for extending unemployment but it may run out if Congress does not act soon to continue long-term unemployment assistance.
Missouri Senator Claire McCaskill told News 4 that she does not support extending any unemployment benefits any further. […]
Senator McCaskill also told News 4 that she supports payroll tax cuts because “that helps our consuming economy.”
Um, senator? Extended unemployment benefits also help “our consuming economy.”
This really isn’t that complicated. Paul Krugman had a column a while back that someone might want to send along to McCaskill.
When the economy is booming, and lack of sufficient willing workers is limiting growth, generous unemployment benefits may keep employment lower than it would have been otherwise. But as you may have noticed, right now the economy isn’t booming — again, there are five unemployed workers for every job opening. Cutting off benefits to the unemployed will make them even more desperate for work — but they can’t take jobs that aren’t there.
Wait: there’s more. One main reason there aren’t enough jobs right now is weak consumer demand. Helping the unemployed, by putting money in the pockets of people who badly need it, helps support consumer spending. That’s why the Congressional Budget Office rates aid to the unemployed as a highly cost-effective form of economic stimulus. And unlike, say, large infrastructure projects, aid to the unemployed creates jobs quickly — while allowing that aid to lapse, which is what is happening right now, is a recipe for even weaker job growth, not in the distant future but over the next few months.
Krugman wrote that a year ago, and fortunately, benefits were extended a few months later. With Republican opposition, this will be tougher this year — and with opposition from Democrats like McCaskill, the jobless and the economy are in even bigger trouble.
The basic concept here is quite simple: unemployment benefits are good for the economy. People who receive the aid aren’t sticking it in some money-market fund; they’re spending it and doing so immediately because it’s their main source of income. This injects demand and capital into the economy quickly, helping the beneficiaries and the rest of us.
I realize McCaskill is worried about re-election in a “red” state, but her position on this is just ridiculous.