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Do Unemployment Benefits Stimulate the Economy?
Mackinac Center for Public Policy ^ | 7/19/2010 | Jarrett Skorup

Posted on 07/20/2010 5:47:29 AM PDT by MichCapCon

With the expected appointment of an interim Senator in West Virginia, Democrats in Washington are hoping to push through an extension on unemployment benefits. Under current law, benefits run out after 99 weeks (up from a previous record high of 65 weeks in 1975).

There's valid argument that a compassionate society with a dynamic economy should provide unemployment benefits, and a legitimate debate regarding how much and how long. But recently, some have gone beyond this and argued not only that these benefits are necessary, but that they actually stimulate the economy.

Most notably, White House Economist Lawrence Summers claims that not extending the unemployment benefit beyond almost two years would cost the U.S. economy $10 billion and 100,000 jobs.

Some center-left economists have calculated that Michigan will miss out on $205.6 million in "economic stimulus." And columnist Jackie Headapohl writes on Mlive.com that, "Unemployment insurance puts money in the pockets of the families most likely to spend the money — which in turn expands the economy and creates jobs."

So is this accurate? Does government money in the form of unemployment benefits expand the economy?

(Excerpt) Read more at mackinac.org ...


TOPICS: Business/Economy; Constitution/Conservatism; Government; News/Current Events
KEYWORDS: michigan; obama; unemployment
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To: MichCapCon
I know that those of you on this site who have managed to keep your job thru this current depression must feel that those who were thrown out of their job and had to (and still have to) rely at least in part on unemployment insurance are to be somehow either looked down on or castigated.

Having been one of the unemployed for an extended period of time (but now - thankfuly - back to being gainfully employed), I myself had to rely deeply on my unemployment insurance.

And no...unemployment insurance does not in any way make up for the loss of one's income from a real job...but at least it helps one eat.

So....please...don't look down your nose(s) at those who...for whatever time it takes to get out of this depression and back to gainful employment...have to rely on unemployment insurance to subsist.

Remember: we remain in a depression. Your job...whatever it is...isn't safe either! You are not bullet-proof. I hope you're ready to live on your savings and the little extra unemployment insurance provides. Otherwise....well, you figure it out.

As to the old saw..."unemployment insurance encourages one to not go out and look for a job."....
First, this is usually put forward by those with jobs (at least to this point in time) who don't have to rely on unemployment insurance.
Second, the unemployment insurance check is not "welfare"; one had to have had a job in order for there to be any unemployment insurance to collect.
Third, it is far more damaging to hear "you're too old to be hired here" (OK...maybe that's not what you hear, but it is certainly true. But just try to prove it. "Age Discrimination" has got to be the silliest law on the books...other than the drinking age),or "we not hiring", or "you've got to be kidding!" or variations on these themes...than it is to have to collect unemployment insurance.

Now....with an ego-centric, socialist president without a clue as to how to help create meaningful, private sector, jobs....the hope of those without employment and no prospects for any, it is dim situation indeed.

No....unemployment does not really stimulate the present depression economy. But what it does do is assist those folks who, thru no fault of their own, were thrown out of work and need assistance to get by. Provide them a re-vitalized private sector in an upbeat, hiring mood...and you will see unemployment insurance tank.

Remember: you could (and may well) be next.

....just sayin'

61 posted on 07/20/2010 10:57:07 AM PDT by Logic n' Reason ("Buzzard's gotta eat; same as worms.")
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To: John D

We spent nearly an entire year living in our car, driving all over the country to find a job. You are clueless.


62 posted on 07/20/2010 10:58:50 AM PDT by publana (Time to go Galt.)
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To: Logic n' Reason
I have not seen where anybody is against all unemployment benefits. What I have seen is that conservatives are against constantly extending them. 26 weeks,(half of a year) is more than enough time to find a job. Maybe not a dream job, but a job.
63 posted on 07/20/2010 11:09:26 AM PDT by John D
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To: John D
The question is whether Government spending stimulates the economy or not. This Canadian example clearly shows that it does not.
64 posted on 07/20/2010 11:34:56 AM PDT by csmusaret (A government that can dictate how much water flows into a toilet is a powerful government indeed.)
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To: Zeddicus; All
"But what's the answer then? Are you suggesting that the Federal government just keep subsidizing unemployment extensions forever, given that the economy will never return to the previous levels of debt and bubble-driven faux prosperity?"

Heck no...I'm not sugggesting a perpetual unemployment extension. I am suggesting that there are plenty of other places the government 'could' cut if they really wanted to pay for these benefits, which they don't (want to). But that's neither here nor there

I am merely saying to those of you freepers that keep making blanket statements... things like 'the unemployment benefits disincentivize the unemployed from looking for work' that it's just not so. People, or rather...most people, on unemployment benefits 'right now' are not having a party..... and when the benefits have run out, the only other option for most, in order to survive is welfare, which only benefits people that have children. Single, childless, over 50 Americans will probably camp out under overpasses (it's gonna get awfully congested).

To go from working your entire life....and working your way up to making $50,000/year...to no job in less than two years, no income and ergo, no roof over your head, is no frickin party. The incentive is to keep that roof over your head and ergo, to look for and find a job. But since there are no jobs out there, at least for the over-50 crowd, the job search is just futile.

Just trying to get the message to some here who have made untrue and rather insulting statements about the currently unemployed and dependent on unemployment benefits. Have a little compassion, a little understanding and please don't blanket condemn your fellow freepers who happen to be caught up in this unfortunate situation. Okay?

65 posted on 07/20/2010 11:43:45 AM PDT by XenaLee (The only good commie is a dead commie.)
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To: John D
"... have not seen where anybody is against all unemployment benefits. What I have seen is that conservatives are against constantly extending them. 26 weeks,(half of a year) is more than enough time to find a job. Maybe not a dream job, but a job.

With all due respect and deference....you (or should I say "conservatives" - tho you paint with a mighty broad brush) don't know what you're talking about.

I assume you're employed?? If so, try being with useful employment for over a year with little or no prospects at finding work....

"Not a dream job, but a job"....indeed!

Whatever makes you think that old folk can walk in all spiffed up for that "a job" when they are number one of 15...or are the 15th in line, hmmmmm?

Tell ya what....try it sometime...."walk a mile in the unemployed's shoes"....then spout.

66 posted on 07/20/2010 12:30:30 PM PDT by Logic n' Reason ("Buzzard's gotta eat; same as worms.")
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To: Logic n' Reason

Exactly and ditto! People like John D, unfortunately, don’t have a clue what it’s like out there, and it sounds like they really don’t care. But I suspect that he and others like him might get the chance to find out the hard way...and probably sooner than they think.

I’m just wondering how many of the folks here, like John D, who claim to be conservatives, also ‘claim’ to be Christians. They appear to be anything but charitable-minded Christians to me.


67 posted on 07/20/2010 12:33:27 PM PDT by XenaLee (The only good commie is a dead commie.)
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To: XenaLee
You, sir...or ma'am as the case may be....have indeed struck the proverbial nail right on the head.

I could not have said it better myself; except to say that if it is tough for the "over 50s", then it is insurmountably tougher for the "over 60s" (of course, the over 60s are a subset of the "over 50s, aren't they??).

Absolutely superb comments tho.

And....IMHO....unemployment benefits should be extended until the private sector jobs lost (and continuing to be lost) during this depression are safely recovered.

68 posted on 07/20/2010 12:35:22 PM PDT by Logic n' Reason ("Buzzard's gotta eat; same as worms.")
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To: Tolsti2

Yeah...and I’ve been seeing freepers (or supposedly freepers) making idiotic and insulting statements like that for quite a while now. This time, I just had to “peep” up...haha!

Now...if they’ll extend the damn benefits, the first thing I’m going to do is to put some of that restored income to good work. I’m going to make a donation to Free Republic! That’s my way of helping the recovery AND getting back at the damned DemocRats. A ‘twofer’! LOL!


69 posted on 07/20/2010 12:39:31 PM PDT by XenaLee (The only good commie is a dead commie.)
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To: publana

You never answered the question. At what point does Unemployment Insurance cease to be insurance and become just another welfare payment administered by different agency?

And by whose morality is your just deserts scheme based? Is theft by majority legislature not stealing? Your inference that I am greedy because I do not like being robbed by government majority is specious. It is still theft, and whether someone benefited and that it served some supposed social good, does not make it any less evil than common thievery at the point of a gun.

So on the road to haven or hell, I believe that you have taken a wrong turn in an attempt to turn thievery by legislature from sin into a virtue. Just deserts indeed.


70 posted on 07/20/2010 12:53:29 PM PDT by Ouderkirk (Democrats...the party of Slavery, Segregation, Sodomy, and Sedition)
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To: Logic n' Reason

And as far as age discrimination goes...those elitist politicians that want to raise the social security age to 70 need to get a grip on reality. Not everyone will be able to work until that age, whether due to health issues or just age-related lack of energy, even assuming that they ARE able to find a job past the age of 65. And unless politicians address the problem and enact penalties against age discrimination, it will continue and only get worse.

I’ve seen Republicans propose that idiotic idea and I cringe every time I see or hear it, even though it would not effect me. I feel for someone like my mom, for instance, who would have been struggling to work at the age of 64 due to her health. So far, I have been blessed with good health (hope I didn’t just jinx myself) and should have no problem working to the age of 70, assuming (big assumption) that I could find a job up to that age.

And yes, the GOP has more than its’ share of out-of-touch elitists. The latest one I went off on was Sharon Angle. I wish it were not so, but the GOP has changed drastically since the Reagan (God bless him) years.

We can be fiscally responsible without being coldly utilitarian and downright uncompassionate. After all, we’re the party of “Christian charity”...not the DemocRats. It seems to me that ‘some’ here need a reminder of that....or maybe a refresher course on how to be a caring conservative.


71 posted on 07/20/2010 12:54:04 PM PDT by XenaLee (The only good commie is a dead commie.)
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To: XenaLee
I think it is proper etiquette to ping someone if you are going to mention them, but I am sure you were too busy looking for a job to do that. I bet if you spent half as much time actually looking for work rather than complaining you might actually find a job.
How did you feel when welfare reform was passed? Did you complain about all the people who were going to be forced to go to work, even if it was not a job they wanted? There are jobs out there, they may not be perfect jobs, but they are there. 26 weeks of unemployment is enough. Do you expect taxpayers to support you until you do find your perfect job?
I do consider myself a Christian, but I do not think a person needs to subsidize everyone who does not have the perfect job in order to be one. Am I a poor father because I made my children work while going to school? I think it gave them good work ethics. My youngest son waits tables right now while going to school, and does pretty well. Are you too good to do that? Red Lobster is ALWAYS hiring. The only problem is that you have to be willing to work, and not sit around complaining.
72 posted on 07/20/2010 1:05:15 PM PDT by John D
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To: John D

Proper etiquette? Why would I want to show proper etiquette to someone like you? I haven’t see you exactly bend over backwards to be courteous to me. Besides, I knew you’d stick around and read my posts. (Call me psychic)

You represent the narrow-minded, holier than thou, coldly uncompassionate hard right that the lefties are always pointing to and using as pr/ad material to sway voters to their side. You’re the poster boy for the “”compassionate conservative”” cliche that the left uses against us..... quite successfully, I might add.

Congratulations. You must be very proud.


73 posted on 07/20/2010 1:19:11 PM PDT by XenaLee (The only good commie is a dead commie.)
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To: XenaLee
I am still wondering,were you for or against welfare reform? You said you were a conservative, most conservatives and even many liberals were for it. If you were for it why? You now want the gov’t to support you, why didn't you want the gov’t to support those on welfare. According to you if a person is against gov’t handouts they are not Christian.
And no I am not a compassionate conservative. I am a conservative. A conservative who has seen down times, but was willing to work wherever I needed to to get back on my feet. I am willing to help those who are willing to help themselves, but not those who just want a handout until they can find the perfect job.
74 posted on 07/20/2010 1:59:26 PM PDT by John D
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To: John D
"And no I am not a compassionate conservative. I am a conservative A conservative who has seen down times, but was willing to work wherever I needed to to get back on my feet. I am willing to help those who are willing to help themselves, but not those who just want a handout until they can find the perfect job."

Well....at least you admit it. Thanks for that. I was definitely for welfare reform. I knew one hispanic witch (a friend's ex-wife) who had never gotten off her flabby rear end to work and had been on welfare for decades. Thanks to the GOP she finally had to get out and work like the rest of us. But that was back when the economy was normal and there actually WERE jobs, before the Obamanation curse befell us.

Like I said, I've worked since I was 16 and even throughout most of the hard times in Texas I was always able to find work. What you refuse to understand or acknowledge is....this is different. This is the worst I've ever seen. I have tons of experience, skills and knowledge but I can't even get called for an interview 99% of the time. The last interview I went on asked how much I made previously. The lady that was showing me the ropes of the job said to be sure not to fudge on the application. So I put down what I had made previously. The job I was applying for paid $10 less an hour, or just slightly more than what unemployment benefits paid. If I had lied and said I made the same as the job was paying, I still wouldn't have gotten the job, since that company always does a thorough check of the info you've given them. The company didn't want to hire someone that would be making only about half what they normally made and for good reason. They figured I'd leave if or when I found something paying more. And there's the rub you people that keep saying take a lessor paying job aren't capable of 'getting'. And as far as your "Red Lobster is ALWAYS hiring" bs....yeah, they probably are. But when is the last time you went to Red Lobster and encountered a server that was over 50?

Point being...you're deliberately out of touch with the harsh reality of the current job market. I'm going to go out on a limb here and make a prediction. You're 57 and currently working for a liberal company. I predict that within the next year you will be "let go". I also predict that you'll find yourself in the same damn situation that many of us are in and have been in. I predict that you will be unable to find other employment and will be forced to rely on (gasp!) unemployment benefits. When that happens...I trust that you'll remember this cyber-conversation and the words you have spoken. I think it'll come back to haunt you.

Have a nice life.

75 posted on 07/20/2010 2:22:23 PM PDT by XenaLee (The only good commie is a dead commie.)
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To: MichCapCon; All
Democrat control of our nation's purse strings kills the economy!

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76 posted on 07/20/2010 3:18:42 PM PDT by Recovering_Democrat
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To: Ouderkirk

Unlike yourself, I don’t have the time to sit around here all day answering fool’s questions.

2 years ago, I would have said 99 months is outrageous. Then I lived it. As long as it takes for the jobs to come back, I guess. If it was hard for this family to find work, a highly skilled family, I shudder to think what it is like for those not as educated and skilled as we. I no longer believe that those who have run dry on unemployment are lazy bums. They’re trying to survive. I’d rather see some of that stimulus money (I know.. it’s not, but it should) go to pay those who HAD jobs and QUALIFIED for unemployment stay afloat, than given to Korea or some commiecrat.

You may rationalize your avarice all you like, it doesn’t change the fact that you are evil. You are the one wishing what were once hard-working families to starve. These aren’t people who have been on the dole for years. These are people that were worker bees.. just like you and I.


77 posted on 07/21/2010 2:53:46 PM PDT by publana (Time to go Galt.)
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To: publana

We peel back the layers and reveal that you are a socialist. From each according to his means, to each according to his needs, for as long as it takes.

Yes, I’m evil for demanding that those who are on hard times work harder. It is not my responsibility to ease the burdens of the unemployed and is is not your place to demand that I do. Your attempt to paint me as evil is just like every other democRAT who sees conservatives as evil.

Maybe DU would be a better place to make your assertions.


78 posted on 07/21/2010 5:07:41 PM PDT by Ouderkirk (Democrats...the party of Slavery, Segregation, Sodomy, and Sedition)
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