Approaching Hazards for a Fragile Recovery
The recovery from the recession continues to be slow. Recent job reports, both nationally and in Wisconsin, are disappointing, with Wisconsin adding just 900 jobs in May. (The Wisconsin Budget Project has more on that in a 6/14/11 blog post.) Wisconsin lost more than 170,000 jobs during the recession and has regained just a fraction of that amount.
The feeble nature of the economic recovery is especially alarming considering that several measures aimed at bolstering the economy are slated to end in the coming months. A recent article in the New York Times warns of the upcoming expiration of several provisions targeted to speed the recovery from the recession.
Chief among these measures is federal funding for unemployment benefits for the long-term unemployed, a program that expires at the end of the year. Other economic supports that are slated to end at the end of the year include the Federal Reserve’s program to pump money into the economy, and the payroll tax cut.
Given the precarious economic situation, it’s hard to know how the economy will react to these programs ending. But when “close to $2 of every $10 that went into Americans’ wallets last year were payments like jobless benefits, food stamps, Social Security and disability,” the ending of these program may prove to be an unpleasant shock not only to the economy, but to the individuals who have been negatively affected by the recession and are depending on that money to pay the mortgage or the grocery bills.