Unemployment Extension: 2014 Benefits Desired By Obama, Some Economists Disagree

When it comes to an unemployment extension, 2014 could be another year where unemployment benefits are extended if President Barack Obama has his way.

As previously reported by The Inquisitr, the unemployment rate in December dropped down to seven percent. In the same time frame, unemployment benefits for 1.3 million Americans ended, as well.

The reason these benefits expired is because a five-year unemployment extension program had just come to an end. This extension was designed to provide for those unemployed for more than six months. The federal government’s program cost an average $1,166 per person per month, which adds up to billions over the course of a year. Unfortunately, the unemployment extension was axed as part of the budget deal made in Congress.

Shortly after the expiration, President Obama used his weekly address as an opportunity to push for another unemployment extension in 2014:

“Just a few days after Christmas, more than one million of our fellow Americans lost a vital economic lifeline – the temporary insurance that helps folks make ends meet while they look for a job. And for many of their constituents who are unemployed through no fault of their own, that decision will leave them with no income at all. And denying families that security is just plain cruel. We’re a better country than that. We don’t abandon our fellow Americans when times get tough – we keep the faith with them until they start that new job.”

There is a debate over whether the unemployment extension ending is a bad thing. Some people predict the unemployment rate in the United States will drop simply because many of the 1.3 million Americans will simply give up on finding jobs, which means they will no longer be counted. But economist Fred Giertz of the University of Illinois believes “tough love” is necessary and the ending of unemployment benefits could force the jobless to work harder at finding work.

The CBO claims an unemployment extension in 2014 would boost GDP growth by 0.2 percent since the unemployed would be spending the money in their local economies. But the CBO also warned the cost is $26 billion over 10 years and they agree with the economists who say job-seekers may “reduce the intensity of their job search and remain unemployed longer.”

Do you agree with President Obama’s unemployment extension 2014 fight? Or do you think it’s better to let the benefits end in the long run?