Millions of Americans will lose their unemployment benefits Dec. 29, 2012, as the compensations expire that day.
The expiry will cut off 2 million Americans from the benefits if the government does not take necessary measures to extend it and solve the problem of "fiscal cliff", reported USA Today.
The incoherent situation has kicked off panic and confusion among the people of America. Despite the matter not being highlighted in the "fiscal cliff" issue, this is one of the most important subjects that could have a drastic effect on the public, reported USA Today.
If the benefits expired, the economy would have to deal with the loss of 400,000 jobs in 2013, reported Huffington post.
"Congress needs to see its way to reauthorize this program so it doesn't lapse," Judy Conti, federal advocacy coordinator of NELP told USA Today.
"It's the middle of winter, it's the only income some people have, it keeps their homes heated, roofs over their head, and it also allows them to feed their children." She added.
The Unemployment benefit is a monetary aid that is given to people who have been displaced off their jobs. If the government extends the emergency unemployment benefits, around 2 million people would be saved from being plunged into poverty. The extension would also help in creation of 30,000 new jobs in 2013 as it would spike the gross domestic product by 0.2 percent, reported Center for American Progress.
"Long-term unemployed workers, who are almost by definition cash-strapped, are likely to immediately spend their unemployment benefits," Lawrence Michel and Heidi Shierholz, economists at the Economic policy Institute wrote for Huffington Post.
"Unemployment benefits spent on rent, groceries, and other necessities increase economic activity, and that increased economic activity saves and creates jobs throughout the economy." they added.
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