Republicans Target Unemployment Benefits?

By Justin Gardner | Related entries in Economy, Jobs, Money, Republicans

As Americans, we’re accustomed to a certain standard of living. Nothing lavish, mind you. Most of us don’t have big, fancy houses or expensive cars. Most of us don’t have investment portfolios bursting at the seams. But we do have families and we do have responsibilities, and given that we pay our fair share into the system, we expect a safety net when circumstances out of our control force us into the ranks of the unemployed.

However, in especially dire economic times…when the system fails us…it’s appropriate for that safety net to be extended until things pick back up. And, as you read the following, let’s remember why unemployment benefits were created in the first place: The Great Depression.

Why did the Great Depression happen? A systemic failure with the banks and no action taken to save them. Why did the depression continue? Because there were no jobs. And no jobs means no spending which means no economic recovery. And so starts a spiral that was impossible to get out of…until the US declared war on the Axis and we started deficit spending like crazy and sent everybody back to work.

Well, WWIII is not on the horizon so extending unemployment benefits is a pretty simple calculation. And yet…Republicans are starting to grumble about extending them?

From Wash Post:

But complaints that extending unemployment payments discourages job-seeking have begun to bubble into the political debate. Sen. Jim Bunning (R-Ky.) recently single-handedly held up the latest extension, a bill to keep unemployment benefits in place for 30 more days, saying Congress should find other cuts to cover its $10 billion price tag.

Sen. Jon Kyl (R-Ariz.) did not join Bunning’s effort, but he defended his colleague’s point of view. Kyl told the Senate he questioned why anyone would see unemployment benefits as helpful to the economy, or to the job market.

“If anything, continuing to pay people unemployment compensation is a disincentive for them to seek new work,” Kyl said. “I am sure most of them would like work and probably have tried to seek it, but you can’t argue it is a job enhancer.”

Actually, Kyl is dead wrong about unemployment benefits not being a job enhancer. Sure, on its face it may seems like it’s not, but let me explain why it actually makes very sound economic sense.

The last thing you want a skilled laborer doing is trying to seek employment below his or her pay grade just to make ends meet. See, to stay an economic superpower, we want computer programmers working as computer programmers, not burger flippers. Why? Because not only does that mean no jobs for burger flippers, but the computer programmer may be missing an opportunity to find a job as a computer programmer and is therefore in a perpetual state of “underemployment.” And the rate of underemployment is always the more important number to look at when gauging the economic health of a country.

Right now unemployment sits at 9.7%, while underemployment sits at 16.8%. Now imagine that second number being 10% higher if we didn’t have unemployment benefits.

Buy hey, Kyl knows this. He’s just trying to get it paid for, right?

Well, tell you what…since the top 1% of income earners took billions out of the system with Bush’s tax cuts…how about we get them to give a little back? See, most of them (like Warren Buffet) are only paying 15% on their investment income…I think they can give up some of their tax cuts to make sure the rest of us don’t lose our homes, stop spending and we all fall deeper into recession…which will effect their investment income.

Sound like a deal?


This entry was posted on Tuesday, March 9th, 2010 and is filed under Economy, Jobs, Money, Republicans. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

29 Responses to “Republicans Target Unemployment Benefits?”

  1. gerryf Says:

    Another communist screed from Donklepant–let them eat cake….

  2. Politicalpartypooper Says:

    Couldn’t agree with you more, and what’s funnier is that Reagan would have agreed with you, too. Ask Mr. Kyl what Ronald Reagan believed about that top tax rate. It shows up in his first tax cut in 1982, where he refused to go below 50% on the highest wage earners.

    Be careful when you tell them. Most Republicans and Conservatives falsely believe that Reagan wanted a flat/fair tax with endless tax cuts for the wealthy. Giving them the truth might cause a bit of culture shock, followed inevitably by them calling him a Socialist. In the end, you can’t get around the numbers or his own words, which can be found in his autobiography.

  3. bubbaquimby Says:

    You live in Missouri right? Our unemployment benefits are terrible, while I am not getting a burger flipping job, I am getting temp jobs way below what I was getting. Also that federal part of it is hardly anything, it’s just something that politicians can pat their back on “see we helped the little guy”.

  4. Tillyosu Says:

    See, I hate when people refer to the “system” as some finite pot of money that belongs to everyone. It’s like when my old tax law professor would tell us that tax law starts with the presumption that 100% of income belongs to the government, and any income not confiscated is a cost to the government, or a subsidy to the taxpayer. I fundamentally reject that presumption.

    All Bush did was let people who lawfully earned their money…keep more of it. And what was the result? Tax revenues INCREASED, and the top 1% actually ended up paying a GREATER proportion of it. Gosh, call me crazy but, it sounds to me like cutting tax rates on the rich is actually GOOD for the rest of us.

    So let’s look at what Justin is proposing here: increasing the capital gains tax in order to pay for an increase, or extension, of unemployment benefits. Does anyone here seriously think that is an efficient allocation of capital? Does anyone here seriously think that is the best way to generate economic growth?

  5. JimS Says:

    Tax revenues did not increase. That is a lie. Why is it so impossible for Republicans to be honest?

    http://www.cbpp.org/cms/index.cfm?fa=view&id=1811

    http://www.factcheck.org/taxes/supply-side_spin.html

    http://krugman.blogs.nytimes.com/2008/01/16/taxes-and-revenues-another-history-lesson/

  6. Jacob Says:

    Tillyosu,

    All Bush did was let people who lawfully earned their money…keep more of it. And what was the result? Tax revenues INCREASED, and the top 1% actually ended up paying a GREATER proportion of it.

    Can you kindly provide links that prove these statements true?

    Thank you.

  7. Frank Hagan Says:

    Only a retiring politician would take a “principled” stand like Bunning did. We always want our politicians to do so, but don’t like it when they really do. Would it have been so hard to maybe find $10 billion in the defense budget, or de-allocate it out of the stimulus funds?

    But I really take issue with this:

    The last thing you want a skilled laborer doing is trying to seek employment below his or her pay grade just to make ends meet. See, to stay an economic superpower, we want computer programmers working as computer programmers, not burger flippers. Why? Because not only does that mean no jobs for burger flippers, but the computer programmer may be missing an opportunity to find a job as a computer programmer and is therefore in a perpetual state of “underemployment.” And the rate of underemployment is always the more important number to look at when gauging the economic health of a country.

    That’s wrong. A person collecting unemployment is surviving, but barely. He doesn’t feel good about himself. Its demoralizing, but he feels trapped by the system if he’s a union worker (forbidden to take non-union jobs) or if he has the opinion that he’s better than other people. The person that refuses to take work because he is waiting for that highly paid buggy-whip manufacturing job to come back has another name: a bum.

    I remember reading “What Color is Your Parachute” back in the 1970s, during a recession, and being amazed that the average worker changed careers 3 times. Not jobs, but careers. Like a teacher becoming an investment adviser. And while no one wants to go backwards, most of those highly paid managers of the chain burger joints started “flipping burgers”.

    Tillyosu is right: increases in capital gains tax rates result in less income to the government, not more. Candidate Obama was asked about this, and he answered that even if the taxes collected were less, it was about “fairness”. In a perverse way, he was saying that the middle class should subsidize investors in order to “feel better” that if they ever had to liquidate, they would pay more.

    If you want to encourage “buy and hold” strategies, increase capital gains taxes. If you want to generate more income for the government, lower them (it can overheat an economy when sell activity increases suddenly, but that’s not a problem right now).

  8. wj Says:

    The rationale for taxing different kinds of income (e.g. wages, dividends, interest, and capital gains) a different rates has never been particularly persuasive.

    “To encourage investment”? Right, so what else is going to be done with the money? Pile a few million under the mattress? Right. Spend it rather than investing? At some point, especially if you are in that top 1%, you just can’t spend money fast enough. Heck, even down towards the bottom of the top 10% (while I was there), I’ve had trouble spending it all.

    Tax everything the same (no, I’m not talking about a flat tax; just the same, possibly progressive, rates for everything). That at least avoids the situation that Buffet has commented on, where his tax rate was lower than his secretary’s, even though he was making vastly more than she was.

  9. gerryf Says:

    All Bush did was let people who lawfully earned their money…keep more of it. And what was the result? Tax revenues INCREASED, and the top 1% actually ended up paying a GREATER proportion of it. Gosh, call me crazy but, it sounds to me like cutting tax rates on the rich is actually GOOD for the rest of us.

    My gosh! That’s terrible. So, as a conservative, you should be all for increasing taxes because the logical result will be the top 1 percent will pay a lower proportion of total taxes, tax revenues will go down, thus strangling the federal government and causing it to contract.

    That’s brilliant, Tillyosu! I support you on this.

  10. michael mcEachran Says:

    Seems to me the debate is: federal stimulative money for doing nothing (i.e. unemployment) vs. federal stimulative money for doing something (i.e, go to war, public works). Yet, one side, eh-hem, wants neither (unless it goes to their district and there’s a ribbon to cut). Well, which is it? – Cuz sitting with your thumb up your hoo-ha doesn’t work out too well; ask Hoover.

  11. Tillyosu Says:

    @wj: Actually, capital gains are not taxed at lower rates just to “encourage investment.” It’s because capital gains taxes are a form of double taxation, and because they tax inflation, which represents no real gains at all. Besides, did it ever occur to you that not everyone’s goal is to “spend” their money as fast as they can? Maybe some people want something to pass on to their children, or give to their church? Indeed, perhaps if your goal wasn’t to spend as fast as you can, maybe you would be in the top 1%.

    @gerryf: Why do you think conservatives want to contract the federal government? I don’t want to speak for anyone else, but personally I think concentration of power is a threat to individual liberties – like the right to own and keep property. Hopefully, you see where I’m going with this…

    @michael mcEachran: I don’t think anyone is arguing that you shouldn’t do anything with the money. But let me offer this. Instead of spending it on unemployment, or war, or public works, why not give it back to the people in the form of tax cuts? (Btw, isn’t that what the government should do every time it has a pile of money sitting around that it doesn’t know what to do with?) That way, instead having a few bureaucrats in Washington deciding what the optimal allocation of capital is, you have hundreds of millions of people making those decisions, in their own best interest. Doesn’t that seem so much more efficient to you?

  12. Jacob Says:

    Tillyosu:

    You forgot about my request to provide the facts that support your argument.

    Thanks

  13. michael mcEachran Says:

    Tillyosu – Yes, tax cuts are a good idea, which is why I support Obama’s massive middle class tax cut, and his tax cuts for small business. But a tax cut doesn’t do swquat for a person who isn’t working, now does it? So, your response is equivalent to GWB’s comment that eliminating the inheritance tax would beneift poor and rich alike. Uhhhh….yeah.

  14. Tillyosu Says:

    @MM: Let me correct you, a tax cut doesn’t do squat for someone who isn’t paying taxes. But that’s not necessarily true for someone who isn’t working. For example, the Bush tax cuts actually caused the tax obligation for many Americans to become negative – i.e. they got a check from the IRS. Now, what is the difference between getting a check from the government in the form of a tax rebate, and getting a check in the form of unemployment compensation? Obviously, the check for unemployment is conditioned on the continued ABSENCE OF EMPLOYMENT. So, recipients have an incentive to reject any employment whose compensation falls below unemployment compensation.

    However, if instead of giving a billion dollars to the unemployed, we give a billion dollars in tax breaks to businesses and wealthy investors, and those tax breaks translate into jobs that pay more than unemployment… then aren’t tax breaks better for a man who’s not working than unemployment?

    @jacob: I would check out this article:

    http://www.heritage.org/research/taxes/bg2001.cfm#_ftn18

    And before you go screaming that it’s a “right wing” think tank, all of their assertions are supported by government data, that you are free to review yourself.

  15. michael mcEachran Says:

    Tillyosu – The thing about this standard tax break vs. entitlement debate is this: Some argue that a “subsidy for everyone” (in the form of tax cuts or credits) for both the Rich and Poor is a better idea than subsidising only the needy. If you incent the rich, they create jobs. If you incent the poor, they stay poor. I get it, and I agree. Really! To a point. But there are extreme circumstances (like the incrediblly high unemployment we’re now experiencing) when this philosophy falls apart. Like quantum physics, the rules fall apart at the extremes. So, a rational and nuanced and intellegent society adjusts to the circumstances. Right now, most trusted economists attest that unemployment checks are the most direct stimulation we could provide to this economy, and the best prevention for millions of families to experiece catastrophic financial failure. If you want to obsess about how outrageous it is that your lazy cousin is getting a free ride on unemployment right now, go ahead, but that argument is ridiculous considering the enorminty of this issue. Honestly, I’m a very fair arbitor, and I consider myself more phyiscally conservative than liberal, but sometimes, when I hear these standard Republican talking points, in the face of this very complex problem, and in the face of all evidence to the contrary, i can’t help but say, WTF? (Sorry if that got “ranty”)

  16. kranky kritter Says:

    I can speak for myself and at least two close friends when I say that I’d be looking much harder for a job if I wasn’t collecting decent unemployment benefits. With the knowledge that as things currently stand, I can possibly collect for another about 48 weeks on top of the about 35 I’ve already collected. So I know for a fact that what these evil republicans are saying is true, if incomplete.

    Nothing wrong with acknowledging this, as well as noticing that it doesn’t make unemployment benefits wrong. As American workers, we’d be stupid not to notice that employers are keeping less and less permanent staff and giving weaker benefit packages, We have every reason to think that jobs will be more transitory in the future. If companies want this “nimbleness” and “flexibility in order to “stay competitive, then workers are smart to want pretty good safety nets so that job loss is not a catastrophe. That means unemployment benefits and subsidized healthcare, to name a few.

    I’ll go ahead and agree with Frank in disagreeing with Justin on the notion of “underemployment.” If there are insufficient jobs in your industry and in your area of expertise, I think your choices are clear. Doing nothing and waiting for those jobs to come back does not seem like a sound strategy. Expecting the government to try to restore past economic conditions also sounds stupid tyo me.

    A much sounder strategy is to
    1. take an available job that keeps you afloat
    2. continue to look for something better and
    3. investigate acquiring skills that make you employable in higher demand industries that pay better

    This is not of course, happy news. I don’t like contemplating it for myself any better than other folks in a similar spot like hearing it. But facing it just isn’t optional.

    One other thing worth noticing in relation to Bunning’s comments is that it’s not like there are bunches of jobs out there going unfilled because folks collecting unemployment aren’t looking hard enough. I’d love to get back to work presuming it was in a non-miserable job with decent pay. But if I look outside my field I am looking at fairly crappy jobs making not much more than I am getting to collect unemployment.

    So, while it’s true that unemployment benefits do raise legitimate motivation issues, personal motivation doesn’t create jobs, and folks collecting benefits really do need them under current circumstances. Inconveniently for ideologues, these things are concurrently true.

  17. Chris Says:

    Unemployment is better than nothing, but at the % of income that they give it wouldn’t even pay for my house. Of course if the only jobs that were available paid less than unemployment, why would you take it? Let the person who made that much money and is now making half of it on unemployment take it. The fact is there is no jobs to be had for people of all income levels, so it’s fairly irrelevant right now.

  18. gerryf Says:

    Chris, you are just not getting it. If we give huge tax breaks to the rich, they will use all that money to hire the rest of us! Paris Hilton needs some more BFFs….Bill Gates needs someone to layout his underwear…Warren Buffett needs some people to lay out all those food tables….Christy Walton needs someone to ride into Rockford to bring back some pig feed…there are yachts to be built, lawns to be mowed…all kinds of menial work for our lords and masters.

  19. JimS Says:

    More money for the wealthy might make more jobs…just not in the United States. So why should the U.S. be the country giving those tax breaks?

  20. Chris Says:

    I know I am thinking beyond my place in society, but I still haven’t ever seen proof that trickle down works.

  21. Chris Says:

    While speaking of taxes:
    http://www.motherjones.com/files/images/Blog_Ryan_Tax_Rates_0.jpg

    This image was compiled by Citizens for Tax Justice, analyzing Paul Ryan’s plan.

  22. michael mcEachran Says:

    One thing I wouldn’t mind is some kind of manditory volunteerism to along with unemployment benefits. Just a thought.

  23. Chris Says:

    lol that seems like a bit of an oxymoron michael :P

  24. michael mcEachran Says:

    yeah, whoops. :} How about voluntary service that’s compulsary…? Obligatory time donations…? I give up.

  25. Justin Gardner Says:

    So all…what do you think about my latest post about the economy recovering quicker than expected?

  26. kranky kritter Says:

    I do agree that the actions taken in the early stages of the crisis to do things like prop up credit markets and prevent widespread bank failures made a big difference.

    But as for the rest, I think it’s incorrect. It’s the kind of predictable cheerleading we can count on you for, Justin. Accentuating whatever scant positives you can dredge up, while minimizing the serious negatives.

    For example, your post includes a statement like “unemployment hasn’t dropped as quickly as we had hoped…” The next word in that sentence is,. of course “but….”

    Fact is, the only thing good evidence exists for is the notion that we stopped a freefall in some cases, and slowed it in others. There really isn’t that much in the way of especially positive news, and there is still lots of bad news to come, in the form of ongoing state budget problems, just to name one thing. California will be appearing hat in hand for a federal bailout soon, and that’ll start a queue.

    One thing we really should not get all starry-eyed about is the stock market rebound. Sure, we’ve seen substantial price appreciation since the March low. BUT, that low was a 50% reduction from the highs of just a few years back. Panic sellers fleeing the market were followed by opportunists. Growth from the low is not so much a sign of economic health as a sign that the panic-prone and the uninformed have bailed. The hard-asses are a but more back in charge. Probably a good thing, but also a sign that in this recovery, growth will have be earned, not imagined. That’s why it will be much slower. The salesmen and bullshit artists have been sent to the back seats.

  27. kranky kritter Says:

    Mandatory Volunteerism?

    I hear what you are driving at, that folks might not get handouts for free, that they’d give something in return. Time. Labor.

    This is one of those ideas that seems pretty sound in theory. But every time it’s tried, it’s a disaster for a variety of reasons. Governments are incapable of administering it and matching available skills to community needs. There are insurance issues. And contract issues with public employees. Misguided advocates for low-income Americans can be relied on to oppose it. And so on. That’s the biggest barrier, that the folks who would be stuck administering it want no part of it, it sounds like a logistical nightmare.

    I would like to see some serious effort be made to establish the bounds for something like this, but I don’t see the will to make it happen. It wouldn’t just apply to unemployment benefits. It could also apply to welfare benefits, student loans and grants. And it could be used by localities to get labor for simple tasks in return for say, property tax considerations.

    But I don’t think it will ever happen. By the way, at base it’s a pretty socialist idea, but it’s the kind that conservatives are more likely to think makes sense. Go figure.

  28. Tully Says:

    So all…what do you think about my latest post about the economy recovering quicker than expected?

    No offense intended, Justin, but I think you should stick to subjects you actually know something about. Which would not include macroeconomics.

  29. michael mcEachran Says:

    And people accuse neocons of being bullies… I don’t see it.

Leave a Reply


NOTE TO COMMENTERS:


You must ALWAYS fill in the two word CAPTCHA below to submit a comment. And if this is your first time commenting on Donklephant, it will be held in a moderation queue for approval. Please don't resubmit the same comment a couple times. We'll get around to moderating it soon enough.


Also, sometimes even if you've commented before, it may still get placed in a moderation queue and/or sent to the spam folder. If it's just in moderation queue, it'll be published, but it may be deleted if it lands in the spam folder. My apologies if this happens but there are some keywords that push it into the spam folder.


One last note, we will not tolerate comments that disparage people based on age, sex, handicap, race, color, sexual orientation, national origin or ancestry. We reserve the right to delete these comments and ban the people who make them from ever commenting here again.


Thanks for understanding and have a pleasurable commenting experience.


Related Posts: