Carney: Unemployment Benefits Could Create Up To 1 Million JobsIm no economic genius, but that makes no sense at all.
"I understand why extending unemployment insurance provides relief to people who need it, but how does that create jobs," Wall Street Journal's Laura Meckler asked Jay Carney at Wednesday's WH briefing.
Carney responded: "Oh, uh, it is by, uh, I would expect a reporter from the Wall Street Journal would know this as part of the entrance exam."
"There are few other ways that can directly put money into the economy than applying unemployment insurance," Carney said.
Carney answers the question: "It is one of the most direct ways to infuse money directly into the economy because people who are unemployed and obviously aren't running a paycheck are going to spend the money that they get. They're not going to save it, they're going to spend it. And with unemployment insurance, that way, the money goes directly back into the economy, dollar for dollar virtually."
"Every place that, that money is spent has added business and that creates growth and income for businesses that leads them to decisions about jobs, more hiring. So, there are few other ways that can directly put money into the economy than applying unemployment insurance, Carney said.
Carney says President Obama is pushing for unemployment benefits to be extended "as we continue to emerge from this recession."
Carney also says this is only one item of a "variety of things to grow the economy and create jobs."
"This is one thing that economists of all stripes agree will directly affect growth, a half-percentage point I believe, economists believe is the payroll tax cut," Carney also said.
Carney estimates that unemployment benefits could create up to one million jobs. However, then he talks about how a possible natural disaster could hurt US economy as well as the global economy.