South By North Strategies, Ltd.

Annie Lowery of Slate.com is baffled by the decision of many states to cut unemployment insurance benefits.

… But there also remain worrying signs that it is too soon to pull the plug on this specific economic support. Gross domestic product is growing at a snail’s pace. New claims for unemployment insurance—an early sign of where the labor market is headed—have bounced back up. A whopping 13.7 million Americans are looking for work. One month of jobs numbers and a boatload of hoarded corporate profits do not a restored economy make. As happened last year, the economy could exhaust its strength, and unemployment could track back up.
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If the recovery does start to flag, those unemployment insurance payments become very, very important. For one, they help families make it through a tough period, with about four jobseekers for every available position. But they also provide what economist-types call an “automatic stabilizer”: Federal money automatically kicks in to juice the economy, helping keep overall demand up. For those reasons, the government has never before cut unemployment benefits when the jobless rate is higher than 7.5 percent. But this time, legislators are starting to dismantle the system early. Count it as one more reason to hope that the jobs picture keeps getting sunnier.