No COBRA Subsidy Extension & Expiring Bush Tax Cuts Will Do Damage

By Jeffrey Paulsen on August 2, 2010, 10:39 am Posted in Business News

The failure to extend the COBRA plan might have a positive effect on the current economic situation, as it will bring more funds into the economy for consumer spending. Insurance companies may not like the idea, but not spending money on insurance premiums will force the money to go to other areas of the economy. Of greater concern is the failure or the unwillingness of the congress to extend Bush-era tax cuts. The tax cuts for the middle class and the wealthy will take money out of the economy and place them into the hands of a body that has not shown that it can spend the money in a way that can stimulates the economy.

How The Economy Will Get Worse

Failing to extend the COBRA subsidy will hurt the unemployed who need long-term health insurance, but it probably will not make the current economic situation better or worse. At most, it will increase the demand for aid on community and faith based organizations that are already overburdened. The tax cuts, however, affect the people who are most likely to provide new jobs. However, the economic problems are not driven by an unwillingness on the part of business owners to spend money. A deeper issue still has not been solved.

 

COBRA And Bush Tax Cuts And The Credit Crunch

The lack of free money to spend may things worse, but the economic conditions came because banks were forced to lend money to people who were considered high credit risks. Banks have responded to this by making sure that they only give out loan to people they believe are extremely good credit risks. Failing to extend the tax cuts will stop consumer spending and not show loaners that the consumer confidence is rising. The lack of COBRA coverage may cause people to start looking for jobs that currently are not there.

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2. Unemployment Extension Benefits, Tier 5 & Cobra – Latest Update
3. Credit Default Swaps Explained: How Can They Work For Me?
4. What To Do: Credit Card Act Not A Help For Small Business
5. America’s Voice: Congress, You Can’t Spend Yourself Rich!