Temporarily Increasing Unemployment Benefits is Better Targeted and More Stimulative Than Suspending Taxation of Unemployment Benefits

Source: Sharon Parrott, Center on Budget and Policy Priorities, January 27, 2009

Both the House and Senate recovery packages include a $25 per week temporary increase in unemployment insurance benefits.  Economists, including Mark Zandi of Moody’s Economy.com, routinely rate increased unemployment benefits as among the most stimulative provisions under consideration.  Zandi estimates that every dollar spent on increased unemployment benefits increases economic activity by $1.63.

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