Among the issues most commonly discussed are individuality, the rights of the individual, the limits of legitimate government, morality, history, economics, government policy, science, business, education, health care, energy, and man-made global warming evaluations. My posts are aimed at thinking, intelligent individuals, whose comments are very welcome.

"No matter how vast your knowledge or how modest, it is your own mind that has to acquire it." Ayn Rand

16 August 2010

Democrat Unemployment Policy Rewards Immoral Mooching

The Emergency Unemployment Compensation program of 2008 was initially funded by the Supplemental Appropriations Act of 2008.  Since then, it has been extended or expanded 7 times.  The most recent extension was on 22 July 2010.  It now consists of:
  • Tier 1:  Up to 20 weeks of benefits in every state.
  • Tier 2:  Up to 14 additional weeks of benefits in every state.
  • Tier 3:  Up 13 additional weeks of benefits in states with a:
    • 13-week insured unemployment rate of at least 4.0%; or
    • 3-month seasonally adjusted total unemployment rate of at least 6.0%
  • Tier 4:  Up to 6 additional weeks of benefits in states with a:
    • 13-week insured unemployment rate of at least 6.0%; or 
    • 3-month seasonally adjusted total unemployment rate of at least 8.5%.
Since all but 4 of the states in June 2010 had unemployment rates of 6.0% or higher, all but the states of North and South Dakota, Nebraska, and New Hampshire may qualify for Tier 3 unemployment benefits.  Qualification for Tier 4 benefits is harder to get the data on, but it appears that slightly more than half the states presently qualify for Tier 4 benefits.  Thus, half the states are subsidizing the other half, as some unemployed people pick up unemployment benefits for as long as 53 weeks.  Curiously enough, people may qualify from as early as May 2006, or well before the recession, until as late as 30 November 2010, or conveniently after the upcoming elections.

What are some of the effects of such long-term unemployment benefits?  Here are a few: 
  • The unemployed
    • wait longer to look seriously for a new job.
    • refuse to take lower paying jobs.
    • continue to look for a job much like their old job.
    • do not start their own business in order to create their own new job.
    • do not move to states where jobs are more plentiful in general or for their job specialty.
  • Employers
    • cannot find as many qualified applicants as they would like for lower pay jobs.
    • find their qualified applicants will not move to the job.
    • cannot find people for training positions, even if post-training pay will be comparable to the unemployed person's previous employment pay.
    • sell fewer goods and services because people will not buy due to the uncertainty created by high unemployment.
    • have to pay higher unemployment taxes to the states due to the high unemployment, making it more expensive to hire anyone.
    • generally are hit with more taxes by local, state, and federal government because their expenses are up and the tax base is depressed.
    • watch the Federal Reserve print money, which will not circulate, but lurks about to create future investment hazards due to inflation.
    • watch anti-business tirades, legislation, and regulations as desperate and befuddled government tries to find someone else to blame for its mistakes.
    • cannot get business loans because financial companies are afraid of the unknown and there is much unknown.
  • Employed taxpayers
    • generally are hit with more taxes by local, state, and federal government because government expenses are up and the tax base is depressed.
    • are more likely to become unemployed as higher taxes drive more businesses out of business.
    • are more likely to become unemployed as desperate government scares, more heavily regulates, and burdens businesses with more paperwork, such as 1099s galore.
    • are more likely to become unemployed as the recession drags on since the unemployed are not working productively and are dragging the economy down.
    • suffer stagnant salaries and wages as recovery is delayed.
    • watch the investments made for their retirement dwindle
    • worry about the debt piled upon their children and grandchildren.
    • worry about the many lost freedoms as governments meddle with and take over the private sector to give the appearance of having new ideas and responding to needs.
I am sure that I could go on and on with direful consequences of the unemployment benefit extensions, but we are all surely tired of bullets by now.  How many reasons does it take to establish that something is a bad policy after all?

It is sad to see many people, who were once productive workers, now out of work.  Very many of them lost their previous jobs through no fault of their own in this government-induced and prolonged recession.  But, there comes a time, rather quickly, when someone unemployed either finds new employment or they create their own job by starting their own business, unless they are immoral.  There are unemployment programs based upon unemployment taxes.  I do not think government has the right to impose such taxes, but they do and those taxes will support a rather brief unemployment period as the unemployed transition to new jobs.  But, presently, there is little such transitioning going on.  This is due to wrongheaded government meddling in the private sector and these extensions of unemployment benefits are one of many boneheaded actions by the government to prolong this recession.  In very many ways, the Obama administration is mimicking the Roosevelt administration in the folly, erratic, and threatening nature of its economic policies.

The Tier 3 and Tier 4 unemployment benefits are analogous to the Thompson administration in Atlas Shrugged deciding to drain the wealth of burgeoning Colorado to keep going a bit longer in what is clearly a death spiral.  Mooch off  Ellis Wyatt with his new oil fields, Nielson Motors, and Hammond Cars so the unproductive can go on a few more days even at the expense of destroying the last healthy part of the country.  This is a great way to prolong a recession which should be over by now.  This unemployment compensation makes the states with fewer anti-business policies bear the costs of supporting the larger numbers of unemployed generally found in the states with poor business policies.  It takes those companies and industries which are stronger throughout the country and makes them weaker to support those who will not take the personal responsibility of moving to where the jobs are, of taking a lower paying job, of learning a new profession, or creating their own job.  It is often said that Obama is the second coming of Carter, but he is more like the transformation of Thompson from fiction to life.

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