Part of a Series
The nation’s economic growth, albeit positive, is mostly too low to substantially reduce the unemployment rate. Millions of unemployed Americans who have been out of work and looking for a job for long periods of time—5.7 million have been out of work for at least six months—are looking for policymakers to improve the economic outlook.
It’s unlikely that economic growth will quickly strengthen on its own, so it will require some additional policy support in the near term. A number of factors hold back economic growth, mainly the crushing debt burdens on American households.
Policymakers hence have to focus on two separate short-term goals.
First, they need to strengthen the economy, which they can do by increasing infrastructure spending on schools, roads, bridges, and so forth, and by extending key middle-class tax cuts, such as the temporary payroll tax cuts, for an additional year.
And second, they need to extend unemployment-insurance benefits for millions of unemployed Americans until the economy and the labor market improve significantly more.
For more on this topic, please see:
- Economic Snapshot for December 2011 by Christian E. Weller