Honestly, the big takeaway is not the laughable notion from Nancy Pelosi that jobless benefits provide the biggest possible stimulus to the economy that Congress can create, although that’s both ridiculous and provably incorrect. We’ve been extending stimulus benefits for almost two years; has the economy been stimulated by it, and has it led to an explosion of new jobs? Not according to today’s unemployment report, or really any of the previous reports from the past two years. The Right Scoop’s clip actually shows what it does stimulate — straw men:
Let’s count the straw men:
- “This is one of the biggest stimuluses to our economy” — No, it’s a net drain on the economy, although for understandable purposes. It reroutes capital from production to non-production. We are paying people who aren’t working by using capital that could otherwise go to creating jobs. It’s a policy tradeoff and understandable, although not for 99 weeks, which is what Pelosi is attempting to extend further.
- “It injects demand into the economy” — Not at the rate in which the capital gets destroyed. Remember, the money for this program gets confiscated from producers and passed through the government bureaucracy to non-producers. What winds up back in the hands of producers is much less than what left their hands in the first place.
- “It creates jobs faster than almost any other initiative” — No, it doesn’t. In fact, it depresses job creation, which is part of the policy tradeoff. If this was right, we’d be at zero unemployment by now. Tax cuts, especially on capital gains, creates jobs by getting capital into the hands of job creators.
- “It’s impossible to think of a situation where we would have a country without unemployment benefits” — That’s not actually the debate. No one is suggesting that we eliminate all unemployment benefits. The debate is whether we will keep extending them further.
Maybe we should just start calling it the Straw-Man Stimulus, because that’s the only production it seems to incentivize.