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U.S. Gov. Spent Over $5T for Unemployment Benefits in Past Year, 9 Times More Than Great Recession

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The U.S. government spent more than $5 trillion on unemployment benefits in the past year, which is nine times more than the amount spent during the Great Recession.

According to data from the U.S. Department of Labor, from March 21, 2020 to March 13, 2021, the number of applications for pandemic-based unemployment benefits continued to increase, costing the government over $5 trillion and adding $3 trillion to the Federal Reserve’s balance sheet.

In response to the Great Recession, then-President Barack Obama signed the American Recovery and Reinvestment Act, which included an extension of unemployment benefits. According to a 2012 report from the Congressional Budget Office, unemployment benefits cost the federal government around $520 billion from 2008 to 2012.

The data from the U.S. Department of Labor comes as weekly unemployment claims have continued to increase, with at least 770,000 first time claims for unemployment benefits were reported by the Labor Department last week.

According to the Labor Department, those unemployment numbers were an increase of 45,000 from the previous week’s revised level—as the previous week was revised from 712,000 claims to 725,000.

The number of continuing claims for the week ending on March 6 reached 4,124,000 according to the Labor Department.

In this photo illustration, a person files an application for unemployment benefits on April 16, 2020, in Arlington, Virginia
Olivier Douliery/Getty

“A year ago, new unemployment claims (for the week ending March 14) came in at just 282,000. One week later with the pandemic declared, there were 3.3 million new claims reported, which more than doubled the following week to the highs of this horrible cycle,” Mark Hamrick, a senior economic analyst for Bankrate previously wrote to The Liberty Buzz.

Earlier this month, the Labor Department reported the 50th consecutive week of more than 1 million weekly unemployment claims.

According to data from the Bureau of Labor Statistics, in December 2007, the national unemployment rate was 5 percent and remained around the same percent for the 30 months prior. “At the end of the recession, in June 2009, it was 9.5 percent. In the months after the recession, the unemployment rate peaked at 10.0 percent (in October 2009),” the Bureau of Labor Statistics wrote in a 2012 report.

President Joe Biden’s $1.9 trillion American Rescue Plan provided Americans with a $300 weekly boost in unemployment benefits while also extending the Coronavirus Aid, Relief and Economic Security (CARES) Act Pandemic Unemployment Assistance and Pandemic Emergency Unemployment Compensation until early September.

The American Rescue Plan also included a provision that waived federal income taxes on up to $10,200 in unemployment insurance benefits for individuals that earned less than $150,000 a year. According to The Wall Street Journal, this provision could save some taxpayers up to $25 billion.

The Liberty Buzz reached out to the Labor Department for comment but did not receive a response in time for publication.

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