Could the unemployment extension passed by Senate backfire in the efforts to better our economy?

The Senate passed without opposition a bill allowing for the extension of unemployment benefits for up to 20 weeks in states with 8.5percent and above. This has drastic effects for states like Georgia who have rates close to 10.1 percent. This allows them up to 99 weeks of benefits. With the common knowledge of 52 weeks in a year this is almost 2 years of benefits for someone who is claiming unemployment.  Included in this bill, the Senate added an extension on the 8,000-tax cut for first time house buyers and 6,500 for “move up” buyers. These both had great intentions to boast the overall position of the economy, but the predicated outcome is controversial.

On one hand it is clear that the tax break for buying houses encourages aggregate spending and demand. It gives an incentive for people to buy and we all know that buying helps the economy grow.  Thus causing constant economic activity and will have a positive on the overall wealth of the nation.  On the other hand the unemployment extension raises some eyebrows. With in reason one can question that some may take advantage of the unemployment extension treating it as “paid vacation” until times runs out and the check stops automatically rolling in.  The unemployment extension could very easily backfire by delaying the sense of urgency one has when having to search for another steady job to make ends meet.