Does unemployment compensation hurt or help our U.S. economy?
Unemployment insurance is essential to the US economy. During good times, more is paid in, acting as a damper to prevent economic overheating. During the bad times, it keeps money in the pockets of consumers, supporting economic activity. Unemployment compensation acts as a smoothing mechanism to keep the economy of the US from suffering from jolts and shocks, providing stability.
Umemployment compensation both is helpful and harmful to our economy. The stimulus that it provides for local and state government keeps our country afloat. It has also a drove our Government deeper in debt because of abuse or lack of motivation on the part of the job seeker. Short version: Long time recieving benefit seekers, hurt the ecomony if they abuse the right.
The purpose of unemployment insurance is to provide workers, who are unemployed through no fault of their own, with monetary payments for a specific period of time or until the worker finds a new job.
Unemployment benefits are provided by state unemployment insurance programs within guidelines established by Federal law. Eligibility for unemployment insurance, benefit amounts and the length of time benefits are available are determined by state law.
I would not necessarily say that it does either. In the first place, the impact of it is not enough to drive an economy of this size. Certainly, anytime you have more money coming into an economy, it helps but in the case of unemployment, it is less money because the monetary benefit paid normally is less than the sum received for those same people when they had jobs...therefore it is a reduction in cash flow to the economy. The hurt comes in terms of the burden that it places on the taxpayer. When benefits are extended for longer than the normal duration and unemployment is high, the funds to cover it must come from somewhere. In our case, it is likely that the funds could come from borrowed money. This is bad for the national debt, the annual deficit, and ultimately has a negative impact on the economy if it takes more tax dollars out of more people's pockets to cover the expense. WB
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