Speaker of the U.S. House Nanci Pelosi

Bill Posey

"It injects demand into the economy, and it is job-creating. It creates jobs faster than almost any other initiative you can name because it is money that is needed for families to survive, and it is spent," Pelosi said earlier this month.

"So it has a double benefit. It helps those who have lost their jobs, but it also is a job-creator."

Pelosi cited figures from the Congressional Budget Office to back up her claim, but the conservative Heritage Foundation has some countervailing data of its own, which suggest that repeated extensions of unemployment benefits reduce the need to search for new work.

According to Heritage research:

• Extending either the amount or the duration of unemployment benefits increases the length of time that workers remain unemployed.
• Roughly one-third of workers receiving unemployment benefits find work immediately once their benefits expire. This happens both when unemployment is high and when unemployment is low, said a report in Industrial and Labor Relations Review.
• Each 13-week extension of benefits increases the average length of time workers receiving benefits stay unemployed by approximately two weeks.
• Families respond to unemployment benefits by reducing other income. Research in the Journal of Labor Economics found that wives’ earnings fall by between 36 and 73 cents for each dollar of benefits married men receive.

Mark Zandi, chief economist for Moody’s Analytics, bolstered Pelosi's contention by declaring, "No form of the fiscal stimulus has proved more effective during the past two years than emergency UI (unemployment insurance) benefits, providing a bang for the buck of 1.61 -- that is, for every $1 in UI benefits, GDP one year later is increased by an estimated $1.61."