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To: i88schwartz
So following that line of logic, if we double unemployment benefits, that should stop the problems in the economy completely.

If I'd have known going to Harvard was that easy, I'd have done it a long time ago.

30 posted on 12/14/2010 11:15:46 AM PST by blackdog
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To: blackdog

Unemployment does not provide economic stimulus in the conventional sense. When they talk about stimulus of unemployment , they refer not to economic growth but to the artificial support of the economy delaying economic contraction, deflation and additional job losses due reduction in demand from people losing the purchasing power that unemployment benefits provide.

In effect, unemployment has temporarily put the brakes on the unstable downward spiral in unemployment where job loss leads to loss of purchasing power which leads to drop in economic demand which leads to more layoffs resulting in even higher unemployment and increased loss of purchasing power.

If unemployment safety net were cut off, we would get a downward spiral of the economy like the Great Depression.

The fundamental underlying problem here is that the Democrats have squandered our capitol reserves on a destructive economic stimulus package which has destroyed job growth and extended the time needed for an economic recovery. The end result will be increasing unemployment for an unnecessarily long period of time with and increasingly negative impact on the economy.


42 posted on 12/14/2010 12:06:14 PM PST by rdcbn
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