Republicans: The Party of Unemployment by Dean Baker

The talking points coming out of Fox News about extending unemployment are complete nonsense...

 

Dean Baker:

Republicans give two reasons for opposing benefits. First, they claim that benefits discourage people from working. Second, they object that the Democrats' proposal will add to the national debt.

On the first point there is a considerable amount of economic research. Most indicates that in periods when the economy is operating near its capacity more generous benefits may modestly increase the unemployment rate. However, they are less likely to have that effect now. The reason is simple; the economy does not have enough jobs. The latest data from the Labor Department show that there are five unemployed workers for every job opening.

In this context, unemployment benefits may give some workers the option to remain unemployed longer to find a job that better fits their skills, but they are unlikely to affect the total number of unemployed. In other words, a $300 weekly unemployment check may allow an experienced teacher the luxury of looking for another teaching job rather than being forced to grab a job at Wal-Mart.

However, if the teacher took the job at Wal-Mart, then this would simply displace a recent high school grad who has no other job opportunities. That might be a great turn of events in Republican-econ land, but it does not reduce the overall unemployment rate, nor does it benefit the overall economy in any obvious way.  

The other argument the Republicans give is that these bills would add to the national debt. For example, the latest extension of unemployment benefits would have added $22 billion to the debt by the end of 2011. This means that the debt would be $9,807,000,000 instead of 9,785,000,000 at the end of fiscal 2011, an increase of the debt to GDP ratio from 65.3 percent to 65.4 percent.

It is possible that Congressional Republicans, who were willing to vote for hundreds of billions of dollars of war expenditures without paying for them, or trillions of dollars of tax cuts without paying for them, are actually concerned about this sort of increase in the national debt. It is possible that this is true, but not very plausible.

The more likely explanation is that the Republicans want to block anything that can boost the economy and create jobs. Throwing people out of work may not be pretty, but politics was never pretty, and it is getting less so by the day.

Posted via email from Jim Nichols