As the United States began to pull out of the worst economic downturn since The Great Depression, economists warned that the recovery would be "modest" and slow.
The chairman of the Federal Reserve, Benjamin S. Bernanke, portrayed a dismal jobs outlook during his semiannual monetary policy report to Congress in July of 2010.
"In all likelihood, a significant amount of time will be required to restore the nearly 8-1/2 million jobs that were lost over 2008 and 2009. Moreover, nearly half of the unemployed have been out of work for longer than six months," Bernanke said.
"Long-term unemployment not only imposes exceptional near-term hardships on workers and their families, it also erodes skills and may have long-lasting effects on workers," Bernanke said.
Left unspoken by Bernanke was the financial impact of looming, long-term unemployment on American taxpayers at a time when Congress approved another round of jobless benefits extensions.
A week later, the Congressional Budget Office warned that month that the growing debt could result in a fiscal crisis.
"Over the past few years, U.S. government debt held by the public has grown rapidly- to the point that, compared with the total output of the economy, it is now higher than it has ever been except during the period around World War II," the CBO said on July 27, 2010.
The national debt grew from 36 percent of the gross domestic product at the end of the 2007 fiscal year to a projected 62 percent at the end of fiscal 2010.
"Further increases in federal debt relative to the nation's output (gross domestic product, or GDP) almost certainly lie ahead if current policies remain in place," the CBO said.
"The aging of the population and rising costs for health care will push federal spending, measured as a percentage of GDP, well above the levels experienced in recent decades," the CBO said.
"Unless policymakers restrain the growth of spending, increase revenues significantly as a share of GDP, or adopt some combination of those two approaches, growing budget deficits will cause debt to rise to unsupportable levels," the CBO said.
One problem: With the unemployment rate stuck, at the time, at 9.5 percent, lawmakers toiled with the question of when it was appropriate to pull the plug on jobless benefits
With the prospect of a jobless recovery looming, how long should the federal government fund unemployment compensation beyond the traditional 26 weeks?
Here is a look at historic unemployment rates when the government has allowed unemployment compensation extensions to expire, according to the New York-based National Employment Law Project.
Expiration Date of Extension Unemployment Rate
- April 1, 1959 - 5.6 percent
- April 1, 1962 - 5.6 percent
- March 31, 1973 - 5 percent
- Nov, 1, 1977 - 6.8 percent
- March 31, 1985 - 7.2 percent
- Feb. 5, 1994 - 6.6 percent
- Dec. 31, 2003 - 5.8 percent
- June 4, 2010 * - 9.7 percent
* On July 22, 2010, unemployment benefits were extended through November 30, 2010.