Thursday, December 2, 2010

Why I Support Extending Unemployment Benefits

Despite my libertarian beliefs, I think it's clear that even libertarians should support the extension of unemployment benefits.  This article from MSNBC notes the dreadful impact not extending those benefits would have on the economy (bolding is mine):
The [Council of Economic Advisers]’s report, which details how a failure to extend the aid would affect people on a state-by-state level, says nearly seven million Americans could lose coverage by the end of next year and that 600,000 jobs are at stake. Goolsbee contended the gross domestic product would be six-tenths of a percent point lower in December of next year if the benefits are not extended, slowing the nation's recovery from the worst recession since the Great Depression.

According to an earlier report by the National Employment Law Project, some two million workers nationally could lose benefits in December if they are not extended, an estimate the CEA also uses. The U.S. Joint Economic Committee estimates failure to extend the benefits program "would drain the economy of $80 billion in purchasing power and result in the loss of over one million jobs over the next year."
In order to preserve the GDP and prevent the loss of even more jobs, Congress must act quickly to take money from people who create jobs and give it to people who do not have jobs.  Poorer people spend more of their money than rich people (who would just do socially irresponsible things like save or invest their money), so if we simply give poor and unemployed people more money, they will spend their way out of our recession.

Additionally, Congress should hire little boys to wander around towns and break windows.  True, shopkeepers would have to pay to replace them, but just think of all the money that would be spent on windowmakers and glaziers.  They would have to hire many more employees to keep up with the increasing demand for their services and they would have more money to spend, creating even more jobs.  Our high unemployment rate would fall dramatically!


  1. You left out an even better idea. The Government can also sell "protection" to the shopkeepers so that their windows don't get broken and their shops don't burn to the ground in the middle of the night. They could use the money to create the BSA (Business Security Agency) with a large "professional" staff empowered to harass customers in the name of security, because we all kow how good for business that is.

  2. The government should also hire groups of thugs to force aimless pedestrians into stores and threaten that if they don't come out of the store with a significant purchase, they'll break their legs. No one wants broken legs so they're bound to spend all the money they have. Think about how that'll help the economy!

  3. Well, government revenues do not come solely out of taxation. We are deficit spending, which means the government is basically printing the money out of thin air to pay for this stuff. If we stopped deficit spending, our GDP would collapse.

    In related news, gold at $1415. Ask Prof Hale what he thinks about that! ha

  4. I think the same thing about that as I do about the price of BMW automobiles. I'm not buying those either. Otherwise, I don't know what you are getting at. GDP has very little to do with the price of gold.

  5. "Congress should hire little boys to wander around towns and break windows. True, shopkeepers would have to pay to replace them, but just think of all the money that would be spent on windowmakers and glaziers. "

    that same argument was disected in the book Economics in one lesson by Henry Hazlitt.

    the money that is spent by the shop owner on fixing windows could have been spent on other goods, such as bying a suit for example...given that the glass is broken, the society as a whole has lost extra goods such as suits or clothes because the money was spent on fixing windows.