Tuesday, June 29, 2010

George Will Thinks Unemployment Benefits Aren't Stimulative.

I see that this idiotic notion that, if you just stop giving the unemployed benefits then they will get off their asses and find work, is not unique to George Osborne and the Tories.

SANGER: And the president's also in the position in Canada of saying, don't do as I do, do as I say. I mean, just the day before he left, Congress could not come to an agreement on a very small extension of unemployment benefits, the most basic stimulus effort that the president tried to push.

TAPPER: 1.2 million Americans are going to lose their unemployment benefit extensions -- or unemployment benefits this week.

SANGER: That's right. So there's a fundamental stimulus action and the president had to go up and tell the Europeans they weren't doing enough for stimulus.

TAPPER: George, why can't they pass this unemployment extension? I don't understand. The Republicans say spending cuts should pay for this, the Democrats know it's emergency spending. It seems like this is something where there could be a compromise.

WILL: Well, partly because they believe that when you subsidize something, you get more of it. And we're subsidizing unemployment, that is the long-term unemployment, those unemployed more than six months, is it at an all-time high and they do not think it's stimulative because what stimulates is the consumer and savers' sense of permanent income. And everyone knows that unemployment benefits are not permanent income.

TAPPER: Rajiv, I'm going to let you have the last word, we only have a minute left.

CHANDRASEKARAN: Both sides in this town have an incentive to let this drag out longer. The Republicans certainly playing to their base don't want to be seen as adding to the debt issues in a midterm election year. The Democrats I think are trying to sort of push the Republicans and trying to make them look like the party that's denying 1.2 million people an extension of these benefits.

At a time when the economy needs stimulating, I can't think of a sillier thing than to deny money to a group of people who are guaranteed to spend every single dollar of what they are given.


Steel Phoenix said...

The only reason this is stimulative is that it is a near immediate source of inflation, but it is far from the best solution. Compare giving money to people in return for their agreement to do nothing, to something like giving money to those who have the fewest assets. Why give money to people for being lazy when you can give it to them for being poor? There are plenty of working poor out there that are being punished for working. There are also plenty of people with high paying seasonal jobs that just soak up unemployment in the off season because they can. I've known several, mostly in construction.

Better yet, I'd rather see the government subsidize Social Security and Workers Comp for small business owners so they can get off the ground and bring back the entrepreneurial spirit that has been crushed from our nation by government and big business.

I like the concept of handing out money to create inflation, but it has to come with a reduction on government waste, or we are just digging ourselves a permanent hole. We might be better off if the government just printed off enough money to pay its debts. We can handle our own.

Anonymous said...

This is a serious issue. I don’t know what the Congress can do. We, the unemployed Americans are extremely concerned about it. But, what can we do excepting signing petitions and creating polls. However, petitions and polls are useful ways of expressing our views. Recently, I have signed a petition on aafter.com. If you are also interested then go to the site and type petition: in the search box and press enter to convey your opinion.

Kel said...

SP, unemployment benefits were first introduced after the great depression because the government understood that it is none of our interests for there to be people on the streets with no income at all. It makes sense to pay it if only to avoid social unrest and crime.

And yes, they do spend all of it, so it is one way to stimulate the economy.