Wednesday, July 14, 2010
Unemployment Benefits Aren't Stimulus - WSJ.com
This is the best explanation of unemployment consequences that I've seen.
Somehow, I think many of us know this.
Of course, we're not afflicted with the political disease...
Somehow, I think many of us know this.
Of course, we're not afflicted with the political disease...
Arthur B. Laffer explains it in the Wall Street Journal. Here's just a part of it:
"On the face of it, the idea that higher unemployment benefits won't lead to more unemployment doesn't make much sense. Imagine what the unemployment rate would look like if unemployment benefits were universally $150,000 per year. My guess is we'd have a heck of a lot more unemployment. Common sense and personal experience indicate higher unemployment benefits will make unemployment less unattractive and thereby increase unemployment even in the Great Recession. As the chart nearby clearly shows, since the 1970s there's been a close correlation between increased unemployment benefits and an increase in the unemployment rate. Those who argue that things are different today don't have the data to back up their claims."
