July 29, 2014 | Contribution by
Adriana Kugler is a Full Professor at the McCourt School of Public Policy, Georgetown University.
"My Medicaid Matters" rally on Capitol Hill, September 21, 2011. Photo credit: Flickr @SEIU
As the dust settles from the U.S. "Great Recession" and the ensuing global recession, many theories circulate about both the nature of the recessions and the success or failure of government economic policies to reinvigorate economies. A welcome perspective to this debate is Adriana Kugler, a Full Professor in Georgetown University’s McCourt School of Public Policy and the Chief Economist at the U.S. Department of Labor in 2011-2012. On the U.S. policy side, she tells us that the package of policies aimed at boosting aggregate demand (including stimulus money, the Recovery Act, Work Opportunity Tax Credits, and even Medicaid) were effective in lowering unemployment. That said, a lesson learned is that some of these outlays at the state level could have been better targeted — for example, spent on education or income-support programs. As for the longer-term policies (including unemployment benefits, skills assessments, and job search and entrepreneurial training) they, too, worked well. But Kugler cautions that the long-term unemployment rate is still too high and the United States is "not out of the woods" (see figure below). U.S. long-term unemployment still too high
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(See Part 1 for insights on the nature of the recession and the resulting high unemployment.)