Almost 2,400 people who received unemployment insurance in 2009 lived in households with annual incomes of $1 million or more, according to the Congressional Research Service.It is also one of the reasons that unemployment benefits and other government entitlement benefits do less to create economic growth that often touted by politicians and the media.
The report was released after about 1.1 million people exhausted their jobless benefits during the second quarter of 2012, when more than 4.6 million filed initial unemployment claims. Eliminating those payments to high earners is one idea being considered as U.S. lawmakers struggle to curb a projected $1.1 trillion deficit for the fiscal year that ended Sept. 30, with the nationwide jobless rate at 8.1 percent.
If government money substitutes for other household income, savings or borrowing, then total spending will not increase at the consumer level. The government benefit increases government debt dollar for dollar, but does not increase consumer spending dollar for dollar because the government entitlement benefit substitutes, in whole or part, for other private money available for consumer spending at the household or individual level.