Economy, Regs, & Taxes

Extending Unemployment

Jan. 8, 2014

The Senate passed a one-year extension of unemployment insurance Tuesday, answering Barack Obama’s call for the extension to be the “first order of business” upon Congress' return after the holidays. Benefits lapsed for some 1.3 million Americans on Dec. 28, which Obama declared was “just plain cruel.” But extended benefits have become the norm during the Obama “recovery.” Six Republicans – Kelly Ayotte (NH), Dan Coats (IN), Susan Collins (ME), Dean Heller (NV), Lisa Murkowski (AK) and Rob Portman (OH) – voted for cloture, making the vote 60-37.

House Speaker John Boehner has signaled that he’s willing to take up the extension so long as it’s “paid for” by offsetting spending cuts. That “pay-go” process, after all, was highly touted by Democrats in the early Obama years. However, the Senate bill will cost $25 billion and it isn’t paid for. We suspect these six Republicans defected as part of a strategy to keep the focus on ObamaCare for the 2014 elections, rather than going to the mattresses over this extension. We’ll see what the House does.

For his part, Obama once again displayed his fundamentally wrong view of economics when he said that “in fact if we don’t provide unemployment insurance, it makes it harder for them to find a job.” Paying people not to work helps them work, he says. He then gave anecdote after anecdote of motivated people who have fallen on hard times and need unemployment benefits. That’s the easy task of a demo-gogue, however – such stories are common, especially in Obama’s “recovery.” But as David Limbaugh writes, “You don’t generate economic activity by punishing producers and taking their earnings and giving the money to others. How in the world could that expand the economic pie?” Expanding the pie is the surest way to make sure the most people get some of it.

16 Comments

Diane in Tx said:

That's right - give people money for not working, and take away money from those who earned it by giving 20+ years of military service to our nation.

Wednesday, January 8, 2014 at 11:45 AM

TheHarp in Oregon said:

"If you pay people not to work, you'll get a lot of people signing up for that job." -- Milton Friedman (1912-2006)

Wednesday, January 8, 2014 at 12:02 PM

David Hartz in Charlotte said:

The only way this could help the economiy is if the money to pay for it was 'borrowed' (from China?). Pay-go would do nothing as it would only take buying power from one to give to another.

Wednesday, January 8, 2014 at 12:33 PM

XCpt in the ether said:

The goal has never been to have a larger pie, it has been to make sure everyone gets an equal slice of it. Getting a larger pie would just benefit "the rich" that are making the pie to start with.

Just more "equal suffering" under the socialist agenda.

Wednesday, January 8, 2014 at 12:59 PM

sgtken in Pa said:

Just why don't I trust Bonehead?

Wednesday, January 8, 2014 at 1:48 PM

wjm in Colorado said:

Simply robbing Peter to Pay Paul, all for the vote of Paul. We have so many Pauls, Peter may never win again!

Wednesday, January 8, 2014 at 2:05 PM

Moliminous in Upland, CA said:

The overwhelming research indicates that folks who have been laid off from their work tend to seriously look for a job about a week after their benefits run out. If they have two weeks' worth of benefits, they seek employment on week three. If they have 44 weeks, they seek employment on week 45. But the lengthy benefit also compounds the chances of employment for the seeker. 44 weeks is almost a year, a year out of the loop. What employer is going to hire someone whose skills have atrophied for almost a year?

A better way would be this. You apply for unemployment. They calculate how much you would receive, say for 10 weeks. They cut you a check for that amount. You're told, "There's no more. Good luck." What better incentive and opportunity than that to get going on getting a job?

Wednesday, January 8, 2014 at 2:17 PM

Mike McGinn in People's Republic of Maryland replied:

Unfortunately, that's a bad plan. People will game it and get "laid off" so that they can file for and collect their 10 weeks of benefits and then go back and get a job a few weeks after they were "laid off".

Thursday, January 9, 2014 at 1:55 PM

mikalson in colville, WA said:

Times are tough. Income w/o effort is a free ride, so why work? I have been there several times. I had a great time while I sorta looked for a job!

I have called my congresswoman with this suggestion.

THE PLAN
Extend the unemployment benefits for 10 months with a reduction of 10% per month. This provides incentive to find replacement income. The recipients get this benefit even if they get a job for 10 months.
They will NOT be eligible for ANY additional benefits for 3 years at the end of this 10 month period.

Mikalson

Wednesday, January 8, 2014 at 3:23 PM

NW_Jack in Pacific Northwest said:

As usual, Republicans are making a failing issue out of a good issue.
The problem is that too many people are waiting for the type of jobs they used to have (read: Before BHO) to come back. Those jobs are mostly gone forever.
Conclusion: What is needed is a program to retrain these folks to job that are available (Read: Low wage jobs). With some political rhetoric around this plan, perhaps the voters will begin to understand BHO economics, and vote accordingly.

Wednesday, January 8, 2014 at 8:32 PM

READY4ACHANGE in ILLINOIS replied:

Well Jackie boy - you just be using YOUR hard-earned tax money to pay for this (IF you even have any). I prefer to keep mine to myself since I EARNED IT!

Friday, January 10, 2014 at 3:24 PM

The Honey Badger in AZ said:

Now hold on just a peapick'n minute! The Constitution does not authorize the Senate to do that; that's the responcibility of the House of Representatives!

Wednesday, January 8, 2014 at 10:15 PM

bretz21 in Pewaukee said:

If we're in such a good recovery and unemployment is coming down like the fools on the left say then we don't need an extension of unemployment benefits. Wait though! What about the nearly 15 million people who have stopped looking for work. We don't need an extension of benefits, we need jobs for these people. All these new regulations won't help either. Boehner will give Obama anything he wants. If the republicans elect him Speaker, again, next year the party is worse than any can imagine and the party is in big trouble.

Wednesday, January 8, 2014 at 11:36 PM

Mel in Washington state said:

My septic system was serviced by a professional and I asked him if his business had expanded to warrant him hiring some help. He told me he spoke to two experienced men about the work. They both told him: "Your crazy! I'm drawing unemployment and they are going to extent my eligibility."

Thursday, January 9, 2014 at 12:24 AM

Mike McGinn in People's Republic of Maryland said:

What people fail to realize is that in order to give someone unemployment "benefits", first you must extract those dollars from the economy.

If the unemployment compensation system were 100% efficient, the best you could hope for is that each extracted dollar would make it back into the economy. In reality they don't, so it is a net loss to the economy.

There is also the "opportunity loss" of what those dollars could have done if left in the economy instead of being siphoned off for unemployment benefits, i.e., paying people not to be productive, but to only consume, as opposed to paying people to produce, which grows the economy (i.e., Gross Domestic PRODUCT).

To make the picture much easier to understand, imagine an ecomony where everyone consumes and no one produces. How long would you expect that economy to last? Those who receive unemployment checks do not produce (since they are not working). They only consume.

Thursday, January 9, 2014 at 2:06 PM

Jake in Carlsbad, CA said:

It's a proven fact that the longer people receive unemployment benefits, the longer it will take them to find work. Unemployment is just another word for welfare. How often do people receiving welfare find work and go off of welfare? Since when did we find it necessary to create another entitlement? Oh, I know' it was during Barack Obama's presidency.

Friday, January 10, 2014 at 1:05 AM