Ending extra $600 in unemployment benefits will impact 20 million Americans, cut spending by $842b

[stopbush]

Ending extra $600 in unemployment benefits will impact 20 million Americans and cut spending by $842 billion, says government agency

Published: June 27, 2020 at 11:00 a.m. ET
By Elisabeth Buchwald

Keeping the supplemental $600 in place through the middle of next year would provide employment to 5.1 million workers, according to an estimate by the Economic Policy Institute

Since the $2.2 trillion stimulus package CARES Act passed in March, Americans who lost their jobs have been able to collect an additional $600 a week in unemployment benefits on top of what their states have distributed. That extra money is set to expire at the end of next month if lawmakers fail to act.

The boost in unemployment benefits “was a really important thing to do when we were closing the economy back in March,” Labor Secretary Eugene Scalia said Wednesday on CNBC. “I don’t think that the $600 benefit is the answer going forward,” he added.

Josh Bivens, director of research at the Economic Policy Institute, a left-leaning think tank, couldn’t disagree more. "Cutting off a policy support that helps households maintain spending is a terrible idea, both for these households’ welfare and for macroeconomic stabilization.’

Given that approximately 10% to 15% of U.S. GDP is driven by consumption, allowing those benefits to expire will strip more than 20 million Americans of a total of nearly $842 billion to spend, according to data released by the Bureau of Economic Analysis, a U.S. government agency that provides official macroeconomic and industry statistics.

https://www.marketwatch.com/story/cruel-and-bad-economics-are-what-this-economist-has-to-say-about-not-extending-the-extra-600-in-unemployment-benefits-2020-06-27

[Sherman A1]

1. We need a Universal Basic Income

The unemployment is nice, but a UBI is better.

[denem]

4. +1

[area51]

11. This, plus Medicare for All.

What about a public option?

[Sherman A1]

12. Indeed

We most certainly need both.

[mr_lebowski]

2. My math says it's costing $12B per week ...

Thus, it will be 70 more weeks until $842B is reached. Assuming a steady 20M people on unemployment, which is not a given of course.

I don't think it should be cut now, for sure, but I'm also really not sure it's going to be needed for 70 more weeks, that seems a little extreme.

And weren't we collectively fretting over the skyrocketing national debt earlier in the week?

[stopbush]

3. It will "be needed" as long as unemployment is high and as long as the virus

is turning the world upside down. It will be needed as long as there is a sound economic reason for it.

As far as fretting over the national debt, why should this spending be the only spending drawing concern? The government can put as many trillions on the national credit card as they like. Why should this spending be viewed any differently than military spending or tax cuts?

[mr_lebowski]

5. $842B is a random number, basically, is my point ...

It will take 70 weeks to reach that amount, and we have no idea how much longer there will be a sound economic reason for it.

I'm generally FOR handing out money from the top of the food chain to the bottom, let me be clear. It's very stimulatory for the economy, and it makes poorer/unemployed people's lives better.

All spending needs to be looked at, and should draw all of our concern, to be clear. This is probably a 'better use than most'.

But the other spending is not the topic at hand.

[Demsrule86]

8. What you suggest would lead to economic collapse...and really is a GOP talking point.

[Demsrule86]

7. There are no jobs...hubs has been trying for three months now...cut the 600 and the economy will

collapse as people can't pay bills or shop...more will lose their jobs. We will be looking at food riots...it really is that dire.

[LizBeth]

10. Right. I am starting to look for a job that is not smack in the middle of covid mess.

I can't see how that will be successful either with so many out of jobs and fighting for the same position, ten times more competitive than an already competitive market.

[Demsrule86]

13. My husband is an engineer and has never had trouble getting a job...there is little out there. Also,

autos as slowing their lines...and there is Covid at various plants...more than 80 out with Covid at auto plant in Indiana. Also...some shifts are going down which means permanent layoffs in this economy...autos lead the way during downturns and during what I think we have here which is a depression.

[LizBeth]

14. +1

[Demsrule86]

15. It really is just terrible.

[House of Roberts]

6. "Cutting off a policy support that helps households maintain spending is a terrible idea..."

The $600 a week isn't causing me to spend at this time, it's causing me to NOT spend, because I see no more income after July. If the unemployment payments are extended, I can turn loose of some of that money for non-essentials.
The Republicans rushed the reopening, caused the spike in hospitalizations and deaths, and now we will have to extend the distancing and shutdowns to turn it around again.

In the Great Recession we had up to 99 weeks of unemployment. My state REDUCED the number of weeks from 26 to 14. Nobody is going to hire until this disease is under control.

[LizBeth]

9. Exactly. July, August, Sept was suppose to be a bit of down time before the second wave.

Now we are having to continue to stay out of work because of spikes. And so in fall instead of a reoccurance, it will spike higher with cold weather and indoors.