Tag Archives: Christmas

WASHINGTON — If Congress lets unemployment benefits expire this week for the long-term unemployed, they won't be the only ones to feel the pain. The overall economy would suffer, too. Unemployment benefits help drive the economy because the jobless tend to spend every dollar they get, pumping cash into businesses. A cut-off of aid for millions of people unemployed for more than six months could squeeze a fragile economy, analysts say. Among the consequences they envision over the next year: _ Annual economic growth could fall by one half to nearly 1 percentage point. _ Up to 1 million more people could lose their jobs. _ Hundreds of thousands would fall into poverty. “Look for homelessness to rise and food lines to get longer as we approach Christmas if the situation can't be resolved,” says Diane Swonk, chief economist at Mesirow Financial. The issue is expected to be taken up in the lame-duck session of Congress that resumed Monday. Among other unfinished business, lawmakers are likely to vote on whether to extend 2001 and 2003 tax cuts that are set to expire at year's end. … That money ripples through the economy, into supermarkets, gasoline stations, utilities, convenience stores. That allows those businesses to hire more people, who, in turn, spend more money. … By contrast, money given to higher-income families – say, through tax cuts – tends to deliver less economic benefit because those taxpayers typically save a big chunk of their windfall. added by: tverdell