President Obama & a New Report on What Unemployment Insurance Means for All of Us

Speaking today to newly-elected governors from around the country, the President and Vice President both touched on a lot of issues -- but one of particular urgency is related to our friends and neighbors who are still having the toughest time in an economy still very much on the mend. As the President explained:

Some of you may be aware that as of today, you’ve got 2 million people who stand to lose their unemployment insurance over the course of the year. If we don’t do something, 7 million people could lose their unemployment insurance. That’s not also -- that’s not just a potential tragedy for those individual families. It could have a huge impact on your local economies because every economist of every stripe will tell you that unemployment insurance dollars are probably the ones that are most likely to be spent, most likely to be recirculated, most likely to help to boost small business and services all across your states and they’re going to have an effect on your sales revenue.

Despite a virtual consensus amongst economists and recent headlines like "Jobless aid loss could choke economic growth‎" and "Loss of jobless benefits could be serious blow to U.S. economy," some opponents of the extension have continued to insist that unemployment insurance does not affect the economy. To try and put the question to rest, the Council of Economic Advisors released a startling report. An excerpt from the release is below, but the entire report (pdf) is worth looking over:

Failure by Congress to act on extending unemployment benefits will have stark consequences for Americans this holiday season, according to a new report from the White House Council of Economic Advisers. Two million Americans in December alone – and nearly seven million over the course of the next year – will lose the temporary support that helps them keep food on the table and make ends meet while they search for a job if Congress fails to act.

“Extending this support to those hardest hit by this crisis is not only the right thing to do, it's the right economic policy,” said CEA Chairman Austan Goolsbee. “Letting millions more Americans fall into hardship will hurt our economy at this critical point in our recovery and immediately undermine consumer spending.”

Without extended benefits, the country would have had 800,000 fewer jobs as of September 2010, and failure to act to extend benefits again could cost the nation 600,000 jobs by the end of next year.