Monday, December 9, 2013

The Stimulative Effect Of Unemployment ?

      This past weekend, President Obama combined his acid tongue with spurious statements of economic fact to promote more spending by the federal government to extend unemployment benefits that are set to expire. Somehow Barack Obama wants the American people to believe the dichotomy of an improving job market as highlighted by Friday's November employment numbers, and that it is essential that taxpayer money be used to extend unemployment benefits to those unable to find work in what his administration has been selling as an improving economy. Like so much about this president, the community organizer in chief expects to butter both sides of the bread simultaneously.
     President Obama scolded Republicans for their well-founded hesitation in passing yet another extension of unemployment benefits, supposedly four years into a recovery from the Great Recession. In so doing, Mr. Obama has once again demonstrated his complete ineptness in practicing leadership skills that result in any outcomes, sans those that come from bullying and deception. I have never before witnessed in my lifetime a president that publicly vilifies his political opposition as a means of negotiation.
     There is a truism in government that when it subsidizes an unwanted behavior, more of it is created. Hence, by subsidizing unemployment, the federal government is encouraging non-work. A German public policy experiment in recent years resulted in unemployment recipients finding work only as their benefits were set to expire. So when the German government extended unemployment two years, it took recipients two years to find work, when they extended benefits three years, it took recipients three years to find work. A similar phenomenon occurs in the United States because a government check is a disincentive for most persons to find work on their own. Put more bluntly, when our basic needs are being met we become slothful and will continue in such a manner until we find that we have no other choice.
     President Obama revealed either his economic ignorance or his contempt for the collective intelligence of the American people when he said, "One of the best ways to stimulate the economy is with unemployment benefits." If this were true, then why not enroll every American in the unemployment system, send them a check every month, and sit back and watch the economy boom. The President, and those who advance this ridiculous theory, contend that the economy is helped by the unemployed buying essentials with their taxpayer-supplied money.This obtuse economic psycho-babble misses two important points. One, the money these folks receive first has to be taken from the economy by the federal government, which also takes its cut. And secondly, if those receiving a government check were actually working, they would spend more money in the economy. And that money would be new wealth created by private sector enterprise and not confiscated wealth redistributed by government.
     There is no benefit to economic growth and prosperity for those who are working to subsidize those who are not. The fact that President Obama is pushing to extend benefits to the jobless is an admission on his part, even though he does not see it as such, of failure. He can dress this wolf in whatever sheep's clothing he wants, but after five years of his economic policy there are more persons not working, a heavier burden placed on those who are, and less prosperity for all Americans.

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