Extended unemployment benefits for 1.3 million people expired yesterday. This morning, while thinking about what I might say in a television interview on the topic to be taped later in the day, I jotted down the following questions. This is a little scratching below the surface to offer up more than what much of the media would have you consider:
How can we not continue to provide income for those who've been unable to find work? Of course that one's easy to understand.
How can we continue to pay people when they're not producing anything in return? That one simply sounds cruel. But, upon inspection, perhaps it's not. There are economists on either side of the argument---some say unemployment benefits stimulate job production, others say the opposite---the latter suggest that extending unemployment benefits actually extends the duration and rate of unemployment. If true (intuitive for some), continuing to extend unemployment benefits is morally wrong on behalf of the very people who receive them (counterintuitive for most).
How can we continue to take from people who work to pay people who don't? Easy to understand, but, to many, sounds cruel.
How is it any crueler to allow 1.3 million people's benefits to expire versus when the number is smaller? Were it 0.3 million, or 0.00003 million, would not the same individual suffering exist? Would the 0.3 million, or 0.00003 million, whose benefits cease be somehow better off because they're part of a smaller population? Surely, if cutting unemployment benefits is cruel, it is every bit as cruel for 1 person as it is for 1 million.
Don't unemployment benefits get spent? And don't they, therefore, create jobs as that money flows through the economy? Makes sense to many. But, if true, shouldn't we then double, or quintuple, the benefits and extend them ad infinitum?
Don't unemployment benefits come from somewhere? Don't we have to tax working folks to pay these benefits to nonworking folks? And doesn't that, therefore, neutralize the economic impact of the spending by unemployed folks?
Since unemployed folks will spend most, if not all, of their benefits, while folks with higher incomes are more apt to save at the margin, don't unemployment benefits---having been taken from savers and given to spenders---therefore, create a net economic benefit to society?
If savings and investment provides the capital for businesses to expand, how can society be better off by taking from savers and giving to spenders? Wouldn't that, in the long-run, result in less overall employment?
Wouldn't increased spending increase profits to businesses, profits that can be used to expand? Makes sense. But remember, folks who own businesses must pay increased taxes to fund the increased spending.
Could the uncertainty of those with capital---knowing they'll foot the bill for seemingly never-ending entitlements---result in less long-term investing and, therefore, less business expansion and, therefore, less job opportunities for those who desperately need them?
Is your personal economy healthier when you spend all of your income, or when you save and invest a portion? Most would say the latter. Which begs the question, if your personal economy is better when you keep some of what you earn, how can society be better when other people don't?