A recent report by JP Morgan Chase claims that the enhanced unemployment benefits, which were enacted to fight the recession, have actually increased the unemployment rate by 1.5 percent. Since the start of the recession, Congress has passed several measures that ultimately have increased the length of time a person can receive unemployment benefits to 99 weeks in some states, with 53 of those weeks fully paid for by the federal government. Congress passes these measures with broad bipartisan support, because unemployment benefits are widely regarded by economists to be among the most effective forms of economic stimulus, since benefits recipients immediately plow the money back in to the economy by using it to pay for things like rent and food. JPMorgan's analyst looks at it a different way: "[T]he availability of these benefits has almost certainly played a significant role in the record rise in the duration of unemployment," the report says. "Consequently, they have also had a role in the stunning rise in the unemployment rate over the last two years."
Source: Huffington Post
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