Monday, September 23, 2019
Hawai'i Free Press

Current Articles | Archives

Tuesday, August 30, 2011
The Unemployment Empty Promise
By Heritage Foundation @ 10:27 AM :: 2845 Views :: National News, Ethics

www.Heritage.org

Sometime next week—we don't quite know when—President Barack Obama is due to announce his latest jobs plan designed to lift America out of its unemployment doldrums. And though we also don't know the exact details of the plan, there's a pretty good chance it will include several key components we've heard before, one of which is the extension of unemployment benefits.

Much like the President's other likely initiatives, this idea isn't a new one, and the White House has made the argument before that unemployment benefits are the best thing since sliced bread when it comes to stimulating the economy. In a White House briefing earlier this month, press secretary Jay Carney explained the rationale:

[Extending unemployment benefits] is one of the most direct ways to infuse money into the economy because people who are unemployed and obviously aren’t earning a paycheck are going to spend the money that they get. They’re not going to save it; they’re going to spend it. And unemployment insurance, that money goes directly back into the economy dollar for dollar virtually.

So it is—and when it goes back in the economy, it means that everywhere that those people—everyplace that that money is spent has added business. And that creates growth and income for businesses that then lead them to making decisions about jobs—more hiring.

But according to a report by Heritage's James Sherk and Karen A. Campbell, unemployment insurance actually leads to longer periods of unemployment and does not provide the promised stimulative effect. In their paper, they address a 2004 study which concluded that each dollar in additional unemployment insurance increased gross domestic product by $1.73. But, they say, that just isn't so. Research shows that unemployment spending does not result in workers consuming more, and workers with extended unemployment insurance benefits remain unemployed longer. "A 13-week extension of unemployment benefits results in the average worker remaining unemployed for an additional two weeks," they report.

Funnily enough, President Obama's new top economist agrees. Yesterday, the President announced that Princeton University economist Alan Krueger will replace Austan Goolsbee as the White House's chief economic adviser. And though Krueger will play a prominent role in crafting the White House's economic strategy, Heritage's Lachlan Markay reports that Krueger's past research doesn't mesh with the White House's stance on the supposed stimulative benefits of extending unemployment insurance:

Krueger co-authored a paper for the Handbook of Public Economics in 2002 that seems to undercut the economic argument for extending unemployment benefits. The paper found that those benefits tend to increase the length of unemployment by discouraging the search for a new job, and may actually encourage layoffs. Conversely, the paper also found that unemployed persons who are ineligible for benefits search harder for a job and are therefore unemployed for less time.

It's anyone's guess whether Krueger will change his tune now that he's on the President's team, but no matter. When the President launches his new jobs plan, and should he call for an extension of unemployment benefits, as expected, the reality remains the same, regardless of how Krueger addresses his earlier body of work: Unemployment benefits don't stimulate the economy.

There certainly can be other reasons for extending unemployment benefits. Under the Obama economy, the average length of unemployment hit a new record last month, surpassing 40 weeks for the first time ever. But no one—Congress, the President, or the American people—should be under the delusion that economic stimulus and new jobs will result.

---30---

FEATURED POSTS

QUICK HITS

  • The death toll from Hurricane Irene has risen to 40, as thousands remain without power. Meanwhile, Vermont is experiencing the worst flooding it has seen in 84 years.
  • Aided by technology Libya acquired from the West, agents working for Muammar Qadhafi spied on emails and chat messages as part of the regime's repression of the country's citizens, according to a Wall Street Journal report.
  • Wikileaks has published nearly 134,000 leaked diplomatic cables in recent days, including the names of people who spoke confidentially to American diplomats and whose identities were to be strictly protected.
  • The latest supposed side effect of global warming? Mental illness. That's according to a new report claiming that depression and post-traumatic stress will increase as a result of climate change.
  • A top advisor to Health and Human Services Secretary Kathleen Sebelius recently compared opposition to Obamacare to opposition to the 1960s civil rights movement. Get the full story on Foundry.org.
Links

TEXT "follow HawaiiFreePress" to 40404

Register to Vote

2aHawaii

808 Silent Majority

808 State Update AM940

ABCDEFG Blog

ACA Signups Hawaii

ACCE

ALEC

Alliance Defending Freedom

Aloha Conservative Alliance

Aloha Life Advocates

Aloha Pregnancy Care Center

American Council of Trustees and Alumni

American Mothers of Hawaii

AMVETS-Hawaii

AntiPlanner

Antonio Gramsci Reading List

A Place for Women in Waipio

Audit The Rail

Ballotpedia Hawaii

Better Hawaii 

Blaisdell Memorial Project

Broken Trust

CAFR Hawaii

Castaway Conservative

Children's Alliance Hawaii

Children's Rights Institute

Christian Homeschoolers of Hawaii

Citizens for Recall

Cliff Slater's Second Opinion

Coffee Break

Conservative Forum for Hawaii

CSIS Pacific Forum

DAR Hawaii

DeedySupport.com

DVids Hawaii

E Hana Kakou Kelii Akina

E Māua Ola i Moku o Keawe

Farmers For Choice Hawaii

FIRE

Fix Oahu!

Follow the Money Hawaii

Frank in Hawaii

Front Page Magazine

Frontline: The Fixers

Genetic Literacy Project

Get Off Your Butts!

God, Freedom, America

Grassroot Institute

Habele.org

Hawaii Aganst Assisted Suicide

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii Coalition Against Legalized Gambling

Hawaii ConCon Info

Hawaii Credit Union Watch

Hawaii Crime Victims' Rights

Hawaii Crop Improvement Association

Hawaii Debt Clock

Hawaii Defending Marriage

Hawaii Defense Foundation

Hawaii Families for Educational Choice

Hawaii Family Advocates

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federalist Society

Hawaii Federation of Republican Women

Hawaii Firearm Community

Hawaii Fishermen's Alliance

Hawaii Future Project

Hawaii Gathering of Eagles

Hawaii History Blog

Hawaii Homeschool Association

Hawaii Jihadi Trial

Hawaii March for Life

Hawaii Meth Project

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Right to Life -- Big Island

Hawaii Right to Life -- Oahu

Hawaii Shield Law Coalition

Hawaii Shippers Council

Hawaii Smokers Alliance

Hawaii State Data Lab

Hawaii Together

Heritage Foundation

HI Coalition Against Legalized Gambling

HIEC.Coop 

HiFiCo

Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Homeless Crisis

Honolulu Navy League

Honolulu Traffic

Horns of Jericho Blog

House Minority Blog

House Republican Caucus YouTube

HPACC

Hump Day Report

I Vote Hawaii

If Hawaii News

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

Investigative Project on Terrorism

Iowa Meets Maui

Jackson v Abercrombie

Jihad Watch

Judgepedia Hawaii

July 4 in Hawaii

Kahle v New Hope

Kakaako Cares

Kau TEA Party

Kauai Co GOP

Keep Hawaii's Heroes

KeyWiki

Land and Power in Hawaii

Legislative Committee Analysis Tool

Lessons in Firearm Education

Lingle Years

Malulani Foundation

Managed Care Matters -- Hawaii

Malama Pregnancy Center of Maui

Mauna Kea Recreational Users Group

MentalIllnessPolicy.org

Middle East Forum--The Legal Project

Mililani Conservatives for Change

Military Home Educators' Network Oahu

Missile Defense Advocacy

MIS Veterans Hawaii

Muslim Brotherhood in America

NAMI Hawaii

NARTH

Natatorium.org

National Christian Foundation Hawaii

National Parents Org Hawaii

National Wind Watch

New Zeal

NFIB Hawaii News

No GMO Means No Aloha

Northwest Economic Policy Seminar

Not Dead Yet, Hawaii

Now What I Really Think

NRA-ILA Hawaii

Oahu Alternative Transport

ObamaCare Abortion Hawaii

Obookiah

OHA Lies

Opt Out Today

OurFutureHawaii.com

Pacific Aviation Museum

Patients Rights Council Hawaii

PEACE Hawaii

People vs Machine

Pritchett Cartoons 

Pro-GMO Hawaii

P.U.E.O.

RailRipoff.com

Rental by Owner Awareness Assn

Republican Party -- Hawaii State

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

Robotics Organizing Committee

Salvage The Rail

Save the Plastic Bag

School Choice in Hawaii

SenatorFong.com

SIFE Remington

SIFE W. Oahu 

Sink the Jones Act

Smart About Marijuana--Hawaii

St Marianne Cope

State Budget Solutions Hawaii

State Policy Network

Statehood for Guam

Tax Foundation of Hawaii

The Harriet Tubman Agenda

The Long War Journal

The Real Hanabusa

Time Out Honolulu

Truth About Trade & Technology - Hawaii

UCC Truths

Union Members Know Your Rights

US Tax Foundation Hawaii Info

Valor in the Pacific

VAREP Honolulu

Waagey.org

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii

Yes2TMT