Thirty-five economists urged President and Congress to extend unemployment

[ProSense]

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Dear Mr. President, Speaker Pelosi, Majority Leader Reid, Congressman Boehner, and
Senator McConnell:

Congress must decide whether to continue the Emergency Unemployment Compensation program
(EUC), a decision that will directly affect millions of families and the entire economy. Authorization
for the additional benefits Congress has been providing since the passage of the American Recovery
and Reinvestment Act in February 2009 expires tomorrow, November 30, and millions of unemployed
workers will soon be affected. I write you out of concern for the jobless, who through no fault of their
own, cannot find work in an economy with only one job vacancy for every five unemployed workers,
and who depend on EUC to pay their rent or mortgage, pay for groceries and gas, and pay for their
heating bills and other utilities.

But I write also out of concern for the economy. Together with Lawrence Katz of Harvard University,
I gathered the signatures of 33 prominent economists on the attached statement, which warns that
letting the Emergency Unemployment Compensation program expire will weaken the economy by
reducing the spending of the unemployed and overall consumer demand. All of us agree that EUC
should be extended for another 12 months and that there is no danger that continuing to provide
extended unemployment insurance benefits will materially raise overall unemployment. We also agree
that deficit financing for EUC is prudent and will not contribute significantly to long-term deficits.
We hope that you act swiftly to renew these benefits, for the good of the economy and the well-being
of millions of deserving Americans who depend on them.

<...>

Statement from leading American economists

Continuing the about-to-expire federal emergency unemployment insurance program, which provides extra
weeks of benefits to the long-term unemployed, is sensible economic policy that will not only assist the
unemployed but help maintain spending, overall demand, and employment at this critical point in the recovery.
Given that there remains a historically high number of unemployed workers per job opening, there is no
danger that continuing to provide extended unemployment insurance will materially raise overall unemployment.
Eliminating these benefits, on the other hand, will cause hardship for the long-term unemployed, scale
back spending, and weaken the economy since unemployment benefits are one of the most effective means
available to support overall demand. Unemployment has remained above 9.0% for 18 months already and
will likely remain high for some time to come, making a strong case for continuing the current program for
another 12 months. Moreover, the special provisions for extended unemployment insurance during recessions
have traditionally been financed by short-term fiscal deficits and this remains a prudent approach. The
program will not contribute significantly to long-term deficits because its costs will diminish automatically as
the economy recovers and unemployment returns to more normal levels.