Unemployment benefits paid by states since the 2008 crash have lasted some six months, after which Federal extension benefits covered another 47 weeks until they recently ran out. That cut off funds to about 1.3 million recipients. The Democrats, anxious to counter bad Obamacare news, want to restore the payments; the Senate is about to consider it. The Republicans have not presented their position yet though the Dems are already accusing them of wishing to starve the unemployed. Those are the politics; what is the reality?
As one might expect these days, the politics are the reality that matters. With the spending already in unmatched deficit, there is clearly no money available to restore the benefits; neither party is presently mentioning that unpleasant fact and neither are the media who are supposed to keep us aware. If the payments resume, they will have to come from borrowed or just printed money; both of those must be eventually taxed from the taxpayers, plus interest. Compounding that, the taxpayers already owe more national debt than they or their children have ever shown an ability to repay.
This resembles the captain of an aircraft who has thrown all the parachutes overboard to lighten his struggling craft notifying the passengers that they are next.
As the politicians keep telling us, the problem with unemployment is, people have too little money to spend. That’s not a good time for introduce big cost increases like Obamacare, with big tax increases to pay for it. The newly insured can’t eat insurance and the newly increased insurance premiums aren’t too nourishing, either. Increasing taxes and costs in an economic downturn is a huge policy no-no though the Dems seem not to remember that and the GOP isn’t pointing it out, either.
The next agenda item for the Dems, after raising unemployment benefit spending of non-existent dollars, is the push for a large minimum wage increase. Their Obamacare is taking so much from so many that they need to do something to get their Santa Claus image back. Never mind that higher labor costs produce higher living costs as employers recover their cost increases with higher prices. It amounts to the government playing musical chairs with the value of the dollar.
So the Senate will vote new unemployment benefits that the House will debate, but fund in this election year. Then, they’ll raise the minimum wage. After all, it isn’t their money they’re handing out. A Krauthamer quote comes to mind: “If you subsidize apples, you get more apples. If you subsidize unemployment…”