Posted on 07/28/2020 6:27:43 AM PDT by Kaslin
Back in 2009, Nancy Pelosi infamously declared the best way to revive the economy was to dole out ever-more-generous food stamps and unemployment benefits. The more people collecting welfare, the better. At the time, this notion seemed laughable. Now this economic illiteracy seems to have become conventional wisdom.
This was a headline in the New York Times recently: "End of $600 Unemployment Bonus Could Push Millions Past the Brink."
Here was the lead on the "news" piece: "When millions of Americans began losing their jobs in March, the federal government stepped in with a life preserver: $600 a week in extra unemployment benefits to allow workers to pay rent and buy groceries, and to cushion the economy.
"With economic conditions again deteriorating, that life preserver will disappear within days if Congress doesn't act to extend it. That could prompt a wave of evictions and inflict more financial harm on millions of Americans while further damaging the economy."
These benefits are not a "life preserver," but a job-killer. A study for the Committee to Unleash Prosperity by University of Chicago economist Casey Mulligan estimated 10 million fewer Americans working by the end of the year, thus killing any chance of a "V-shaped recovery."
Perhaps that's why Pelosi is so adamant about the policy remaining in place. This would mean a high unemployment rate in November when voters go to the polls. How convenient for Pelosi and Joe Biden.
Incidentally, there are now some 5 million unfilled jobs in the U.S. today -- near an all-time high. This is a weird predicament we are in. Even with some 25 million unemployed Americans, employers are hanging "Help Wanted" signs in the windows.
Here's why. Under the Pelosi policy, 5 out of 6 unemployed workers are getting paid more NOT to work than to return to the job, according to the Congressional Budget Office. We estimate that most workers who earn $30 or less are financially better off staying off the job -- even as the economy improves. Many workers can get twice as much for staying unemployed. Workers are supposed to lose unemployment benefits if they are offered a job and don't take it. But workers know how to game the system. They can pretend to be sick, and employers are loath to bring a contagious worker back in the office or factory.
Employers are now telling me that to get workers back on a construction crew, on a factory line or in a restaurant, employers must pay workers, in cash, say, $100 or $200 a shift so they can still collect the unemployment benefits. The Economist magazine recently wrote that the extra unemployment benefits are doing more harm than good. Liberal groups are marching in the streets for another six months of these payments.
This policy is what I have long-called "economic bimboism." Somehow, magically, if I pay my kid who gets up, mows lawns and works hard 40 hours a week, and I pay my other son even more money for staying home and playing computer games, this strategy is going to lead to more work effort in the Moore household. I assure you it won't.
Paying people not to work is no way to expand economic output, jobs and prosperity. By this warped logic, we should start paying unemployed workers $5,000 a week, and we will really have a rip-roaring recovery.
This is not just lousy economics; it also violates basic principles of fairness. Think of a construction company with 100 employees laid off. They are all offered their jobs back a month later, but only 50 come back to work. Under the Pelosi scheme, the 50 that work hard get less money than the ones who stay home and watch TV. The suckers here are the ones who return to the job.
The only way politicians can "stimulate" the economy and lower unemployment is by incentivizing more economic production. This is why a payroll tax cut makes a lot of sense, and let us hope President Donald Trump, who favors the idea, doesn't give up on it. Every worker -- the heroes of our economy, including nurses, technicians, sanitation workers, truckers and nursing home caregivers -- would get a 7.5 percent pay raise starting on or around Aug. 1. Every small business would see their payroll costs shrink by 7.5 percent. By a 2-to-1 margin, workers love the payroll tax cut.
Skeptics complain that the payroll tax cut only helps people with a job, not the unemployed. Wrong. The best way to help the unemployed, Nancy Pelosi, is not by passing out food stamps and unemployment benefits. It is by getting people a job, a paycheck and a step on the economic ladder. And there is one other thing that liberals seem to have forgotten: there is dignity and educational value in working rather than getting a welfare check paid for by someone else.
A tap on the gas pedal while your other foot is firmly pressed on the brake does nothing.
These miniscule payments to the poor and middle class are relief funds for the poor and vote-buying trivialities for the middle class.
But they are not an “economic stimulus”.
Apparently, a lot of Republicans agree...
I have yet to see a restaurant with dispersed outdoor tables in my area.
Restore the full real property tax deduction do we can win back the House.
Trust me, EVERYONE who works the front lines in UI can’t wait for this $600/WK cluster to END!
The self-funding old age Social Security system should not be undermined by a payroll tax cut.
As a matter of fact there is a restaurant above the Soccer field of my hometown. My Dad, Mother and we kids used to go there when the local Soccer team played and my dad watched the game from the garden where they had tables and chairs set up.
I assume that he means $30 an hour or less. That's a annual salary of $62,400. In order to replace that unemployment would have to pay $1200 a week - $600 after the federal supplement. In Missouri the weekly benefit would be $320 so on unemployment I would be making more than a thousand dollars less a month. How is that financially more beneficial to stay home?
Vaccine introduction is being mismanaged.
The federal government therefore needs to be able to help the unemployed until June 2021 and shouldn’t squander money merely to help quarterly earnings reports.
Many states may need to rollback reopenings.
The proposed $1200 stimulus payments are not timely.
Stimulus payments should not be made until the economy can stay open for sure.
Overloading our hospitals with people getting sick after a buying binge us not the way to go.
Kind of hard for many to return to work when the government closed most businesses...
Childcare can take a big bite out of $62000/year.
Doesn't apply to me. But you know what does? Medical insurance and 401k. None of which a get sitting at home on unemployment.
How do you know when it can stay open for sure?
How do people pay bills in the meantime?
When have the hospitals been overloaded?
Not continuing payments could cost us the election.
The true economic repercussions of this are far from over.
Biden claims his universal health care plan will cost $75 billion a year.
Democrats will claim that if $3 trillion can be spent to buy Trump’s reelection, $75 billion per year can be spent on the Biden universal health care plan.
The Democratic quest for more freebies never slackens. Don’t encourage our freeloaders with more $1200 handouts.
It is outright vote buying.
I live quite well on $5000 per year.
My total income is less than $200 per year.
I get no government benefits other than Obamaphone and free local scheduled bus service.
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