President Obama has struggled occasionally to defend his economic policies. He's called for belt-tightening, then more stimulus, then more belt-tightening. He's been weirdly sotto voce on the second stimulus bill, releasing a letter he sent to Congress and pleading with the G20 rather than making the case more publicly to Americans.
But his weekly address calling for the extension of unemployment benefits was excellent. This allusion to jobless benefits as emergency disaster relief is particularly inspired. We wouldn't hold up hurricane relief aid because of disagreements over spending cuts. Why do the same with UI?
Now in the past, Presidents and Congresses of both parties have treated unemployment insurance for what it is - an emergency expenditure. That's because an economic disaster can devastate families and communities just as surely as a flood or tornado. Suddenly, Republican leaders want to change that. They say we shouldn't provide unemployment insurance because it costs money.
He also made a clear economic case for unemployment insurance as stimulus that reaffirms one's belief that the president can explain economic concepts like aggregate demand and the multiplier without using the words aggregate, demand, or multiplier.
Most economists agree that extending unemployment insurance is one of the single most cost-effective ways to help jumpstart the economy. It puts money into the pockets of folks who not only need it most, but who also are most likely to spend it quickly. That boosts local economies. And that means jobs.
Some day in the future, the deficit will be more important than the unemployment rate, and the most important economic case to make will be about inflation and interest rates rather than demand and multipliers. But for now, the president is making the right case, and making it well.
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