By Covering Business March 14, 2012
Joblessness begets joblessness.
The unemployment rate has remained above 8% for the last three years, the longest period at that level since the Great Depression, and the Congressional Budget Office projects it will remain there until 2014. The reasons: buckling demand for goods and services and a workforce with increasingly dated skills.
So, what now? The CBO looked at a variety of potential policy responses to the problem and conducted a cost-benefit analysis of each one. It published its recommendations in a February report.
Here are the two strategies the CBO said would be the most cost effective:
• Put more money in the pockets of people most likely to spend it (e.g. expand tax credits to lower-income workers or offer more aid to the unemployed).
• Lower the cost to businesses of adding more workers (e.g. cut payroll taxes).
Read the full study (PDF).
