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Do Unemployment Benefits Stimulate the Economy?
Mackinac Center for Public Policy ^ | 7/19/2010 | Jarrett Skorup

Posted on 07/20/2010 5:47:29 AM PDT by MichCapCon

With the expected appointment of an interim Senator in West Virginia, Democrats in Washington are hoping to push through an extension on unemployment benefits. Under current law, benefits run out after 99 weeks (up from a previous record high of 65 weeks in 1975).

There's valid argument that a compassionate society with a dynamic economy should provide unemployment benefits, and a legitimate debate regarding how much and how long. But recently, some have gone beyond this and argued not only that these benefits are necessary, but that they actually stimulate the economy.

Most notably, White House Economist Lawrence Summers claims that not extending the unemployment benefit beyond almost two years would cost the U.S. economy $10 billion and 100,000 jobs.

Some center-left economists have calculated that Michigan will miss out on $205.6 million in "economic stimulus." And columnist Jackie Headapohl writes on Mlive.com that, "Unemployment insurance puts money in the pockets of the families most likely to spend the money — which in turn expands the economy and creates jobs."

So is this accurate? Does government money in the form of unemployment benefits expand the economy?

(Excerpt) Read more at mackinac.org ...


TOPICS: Business/Economy; Constitution/Conservatism; Government; News/Current Events
KEYWORDS: michigan; obama; unemployment
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1 posted on 07/20/2010 5:47:34 AM PDT by MichCapCon
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To: MichCapCon

Let’s see, theft of resources from the producers, transferred to the non-producers. What could possibly go wrong?


2 posted on 07/20/2010 5:49:37 AM PDT by Ouderkirk (Democrats...the party of Slavery, Segregation, Sodomy, and Sedition)
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To: MichCapCon

“Do Unemployment Benefits Stimulate the Economy?”

NO.


3 posted on 07/20/2010 5:49:37 AM PDT by SumProVita (Cogito, ergo...Sum Pro Vita. (Modified Decartes))
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To: MichCapCon
"Do tax cuts for businesses make it easier for businesses to hire more people?"

Yes.

4 posted on 07/20/2010 5:50:52 AM PDT by ClearCase_guy
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To: ClearCase_guy

Oh, there you go asking softball questions again...


5 posted on 07/20/2010 5:52:09 AM PDT by RaceBannon (RON PAUL: THE PARTY OF TRUTHERS, TRAITORS AND UFO CHASERS!!!)
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To: MichCapCon
Henry Hazlitt: "Economics in One Lesson: The Shortest and Surest Way to Understand Basic Economics"
6 posted on 07/20/2010 5:53:26 AM PDT by Ozone34 ("There are only two philosophies: Thomism and bullshitism!" -Leon Bloy)
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To: MichCapCon
Extended Unemployment Insurance Benefits: The Heritage Foundation 2010 Labor Boot Camp
7 posted on 07/20/2010 5:56:29 AM PDT by mewzilla (Still voteless in NY-29. Over 250 roll call votes missed and counting...)
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To: MichCapCon

I don’t understand why media reports always focus on the 99-week eligibility period - this is entirely dependent upon WHEN you got laid-off. If you got laid-off recently, you’re done after 26 weeks now, period. The only people who got 99 weeks were those who got laid-off 99 or more weeks before this June.

I got laid-off last November, and when the extension expired in June, so did my unemployment.

Note: I’m not complaining about this or asking for another extension. Extended benefits IS a disincentive to actually finding work. Of course, that is EXACTLY what this government wants - a large population of unproductive voters who are dependent upon government checks.


8 posted on 07/20/2010 5:59:52 AM PDT by Zeddicus
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To: MichCapCon

nancy pelosi says so therefore, no.


9 posted on 07/20/2010 5:59:56 AM PDT by Texas resident (Outlaw fisherman)
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To: MichCapCon

Follow the money:

The US borrows money from China to pay unemployment benefits.

The government disperses the checks to he unemployed.

The unemployed go to WalMart, Target, etc., and spend the money.

WalMart and Target restock their inventory of the items purchased by the unemployed by ordering more goods from China.

So much of the money goes back to China, making a profit for the Chinese.

The original loan from China has not been paid down and interest on it is still accumulating.

Yet China has a large portion of their own money back and at a profit.

This is the way to prosperity?

For whom:


10 posted on 07/20/2010 6:00:45 AM PDT by old curmudgeon
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To: MichCapCon

I compare it like a person grabbing a container they think was a fire extinguisher to put out a fire on someone but..

Its really a can of pepper spray.


11 posted on 07/20/2010 6:01:42 AM PDT by Eye of Unk ("In a time of universal deceit, telling the truth becomes a revolutionary act" G.Orwell)
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To: MichCapCon; ding_dong_daddy_from_dumas; stephenjohnbanker; DoughtyOne; FromLori; Gilbo_3; NFHale; ..
RE :”Most notably, White House Economist Lawrence Summers claims that not extending the unemployment benefit beyond almost two years would cost the U.S. economy $10 billion and 100,000 jobs... .. “Unemployment insurance puts money in the pockets of the families most likely to spend the money — which in turn expands the economy and creates jobs.”So is this accurate? Does government money in the form of unemployment benefits expand the economy?...Believers in Keynesian economics always fall back on that supposed “multiplier” effect to defend more government spending. It was used to sell the $787 billion 2009 stimulus, the $152 billion 2008 stimulus, the 2007 stimulus, and all the other stimuli here and around the world

My favorite subject. If this is really true then how can the debt commission recommend cutting entitlements? Doesn't social security create jobs like this compensation does? It is all bogus. No, not all tax cuts pay for themselves either. More on this later.

12 posted on 07/20/2010 6:02:42 AM PDT by sickoflibs ( "It's not the taxes, the redistribution is the federal spending=tax delayed")
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To: MichCapCon
Do Unemployment Benefits Stimulate the Economy?

Why do people parrot stupid leftist terminology like "stimulate" when it comes to the economy?

The economy isn't robust because its been "stimulated" or "tickled" by the government. Pay attention class.

Government creates poverty.

The free market creates wealth.

Government produces nothing and never has or never will create wealth - it can only act as either an agent to protect the free market or an agent to retard the free market and hurt the economy.

13 posted on 07/20/2010 6:04:10 AM PDT by Jim 0216
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To: MichCapCon

One way to stimulate the economy is to stop paying people to sit on their butts. Make them go out and get a job. They may not find the perfect job but let them work while they are looking. If they can not find a job in two years they are not looking.


14 posted on 07/20/2010 6:06:02 AM PDT by John D
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To: MichCapCon

the writer is in Michigan, where I believe they ARE the economy


15 posted on 07/20/2010 6:13:49 AM PDT by Buckeye McFrog
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To: MichCapCon

Most notably, White House Economist Lawrence Summers claims >that not extending the unemployment benefit beyond almost two years would cost the U.S. economy $10 billion and 100,000 jobs.

LOL! Some people are so stupid that a public hanging is in order. - no sarcasm intended at all.

If this is the case, then why stop there?
Just extend unemployment benefits to everyone in America & our economy will be ZOOMING!

So listen up America! Quit work now! Save the economy!!


16 posted on 07/20/2010 6:16:10 AM PDT by bill1952 (Choice is an illusion created between those with power - and those without)
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To: MichCapCon

This is like saying that drilling a hole in the bottom of a boat will let out the water faster.


17 posted on 07/20/2010 6:16:40 AM PDT by RexBeach ("Duty is ours; consequences are God's." Thomas "Stonewall" Jackson)
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To: MichCapCon

no ...its to buy votes.


18 posted on 07/20/2010 6:17:43 AM PDT by dalebert
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To: Jim 0216

“Why do people parrot stupid leftist terminology like “stimulate” when it comes to the economy?”

Thank you, thank you, thank you. All this stimulus/quick fix talk is rather adolescent. Economic growth and prosperity are a function of work, savings, investment, production. Stimulants produce temporary illusory results and long-term damage. It took decades to destroy our economy and it will take longer than a quarter to restore it.


19 posted on 07/20/2010 6:23:35 AM PDT by all the best
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To: MichCapCon
From the article:

"So is this accurate? Does government money in the form of unemployment benefits expand the economy? "

This is a rhetorical question, right?

20 posted on 07/20/2010 6:23:41 AM PDT by TaxPayer2000 (The United States shall guarantee to every state in this union a republican form of government,)
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