The unemployment aid provided to long-term jobless people in the US will be ended very soon, and this will pinch the government and economy very hard. Why? Reports say that the reason for this move is because long term unemployed people who receive the aid, allegedly spend it by investing it into businesses, paying taxes, bills and even day-to-day shopping. Hence the decision to pump the money back into the economy.
(AP Photo/The Courier-Journal, Michael Hayman)
According to experts, if there is a cutoff from the unemployment benefits for even six months, this will shake up the economy so hard that it would fall face forward once again. It will also have undesired consequences in the economy as well as the market, as some additional 1 million people will be losing their jobs, and the economy will fall by another one half percent.
There will be more homeless people around and it will rise further without the unemployment benefits and in addition to this, food and ration lines will be getting longer by the day, just before Christmas. There will be dire need to change the way business is being done in the United States, or else it will be the common people who will be suffering the most.
In a related area, the Labor Department stated that jobless claims have shot up by by 26,000 and stands at 436,000 as of November 27, 2010.