How the right justifies cutting 1.3 million Americans — including 20,000 veterans — off emergency unemployment insurance
The economic case for emergency unemployment insurance is pretty simple.
When the long-term unemployment rate is high, offering unemployment benefits to those who have been out of work for six month puts money immediately back into the economy, as there is little-to-no chance the unemployed will save that money. This consumer demand helps create new jobs or, at least, keeps more people from being put out of work.
The argument against emergency unemployment insurance assumes that people do not want to work. They’re not taking jobs because they’re enjoying the cream of that sweet government teat. Cut them off and watch. They’ll get a job!
Rand Paul — the man who apologized to BP because the president was mean to them after they were responsible for the biggest oil spill in American history — said extending these benefits does a “disservice to these workers.”
The people who are being cut off of unemployment insurance this weekend don’t feel as if Senator Paul is doing them a favor. But trust him. Big government — informed by Austrian economics — will save them.
People receiving unemployment insurance must, by penalty of law, be looking for a job. There are two people looking for work for every available job. The long-term unemployment rate is double what it’s been at any point when we cut off emergency insurance. And Republicans seem to be arguing that forcing a 50-year unemployed accountant to take a job at McDonalds is good public policy.
Still Republicans have refused to extend the benefits. And they will continue to do so, unless the program is “paid for,” by starving some other program that helps the needy, as defense programs, no matter how wasteful, are off limits.
The easiest way to fund the $25 billion it would take to extend the program, Jon Lovett points out, is to end America’s welfare program for investors — the capital gains and dividend tax breaks that provide a $120 billion a year giveaway to those who make their money by playing with money.
Those who oppose paying the unemployed not to work seem to have no problem paying rich people not to work. The vast majority of the benefits of the capital gains and dividend tax breaks goes to the richest 1 percent.
If there’s a “moral hazard” in paying people to not to work, how about the moral hazard of subsidizing speculation and encouraging risky high-yield investment?
Inequality has skyrocketed as we’ve offered special tax treatment for investment income and the stock market is constantly hitting new highs even as millions are out of work.
But of course, everyone knows it was the unemployed who bundled trillions in crappy mortgages, sold them to suckers and crashed the global economy.
The least we can do is cut them from the meager sustenance we offer them at Christmas time.
[Image via James Lee | Flickr]