Extending the benefits actually cost jobs

Extending the benefits actually cost jobs

Who would have thought that extending unemployment benefits further and further out would actually cause people to stop looking for work altogether? Well, actually, those who know that incentives (and disincentives) actually work; you know, market economics. How many jobs were created after the 99 week benefit system was stopped, and how many folks went back into the labor force? Lots. Listen in.

President Obama did not like the way Bush used executive orders to increase the power of the President. Yet he has used EOs and something just as powerful (but not as well known) to leave Bush, and all presidents for the last 70 years, in the dust. I’ll be discussing the Presidential Memoranda.

And finally, where’s that $2500 per year we were supposed to save from enacting ObamaCare(tm). Numbers grounded in reality tell quite a different story.

Mentioned links:

How Obama has used executive powers compared to his predecessors

Obama issues ‘executive orders by another name’

Extended Unemployment Benefits Hurt Jobs, New Report Finds


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Show transcript

President Obama had complained about how the office of the President had become too powerful under George W. Bush, what with all the executive orders he had issued. Since his election, Obama, as well as Harry Reid in the Senate, have made a note of the fact that he has issued fewer of them than Bush.

But that’s not the whole story. A presidential “memoranda” is an instrument with the same effect as an executive order, and while presidents before him have used the same thing, Obama has signed 33% more of these memoranda in 6 years than Bush did in 8. Added together, according to USA Today, Obama has issued the most executive actions since Jimmy Carter, and is on track to take more actions than any president since Harry Truman battled the “Do Nothing Congress” almost 70 years ago, and he’s the first president whose memoranda have exceeded the number of executive orders.

So just remember this the next time you hear a Democrat complain of presidential overreach, or anyone in the administration claim some sort of success in that area. What Obama complained about before the election, he has continued with, and increased, during his own time in the Oval Office.

If you like your imperial President, you can keep your imperial President.

In 2013, Democrats argued that ending a “temporary” unemployment-benefits program, called Emergency Unemployment Compensation (EUC), would hurt families in need. In fact, they called unemployment benefits “one of the best ways to grow the economy.” At the same time, Republicans argued that the extended benefits program was holding back job creation, which is what the unemployed really needed. At one point, the program extended unemployment benefits for 99 weeks. At the end of that year, the program ended.

And then what happened. The National Bureau of Economic Research has published a study that stated:

  • “1.8 million additional jobs were created in 2014” due to the end of EUC.
  • “In the aggregate, our estimates imply that [the end of EUC] accounted for about 61 percent of the aggregate employment growth in 2014.”
  • “Almost 1 million of these jobs were filled by workers from out of the labor force who would have not participated in the labor market had benefit extensions been reauthorized.”

That’s millions of job created, and a million people with jobs who would have been discouraged from doing so had the government kept extending handouts. Which is better? Which helps Americans more; more handouts, or actual jobs?

Democrats often accuse Republicans of painting with a broad brush, suggesting that all welfare or unemployment recipients are lazy freeloaders. I’ve seen that brush used, and it’s unfair to those who are truly in need. But there are those – a million, maybe more – who really do just need a kick in the pants to get out there and find a job. And that kick can be as simple as not paying them for almost 2 years to not work.

Incentives work. And so do disincentives. You can’t just assume that handouts are always better, even though they might make you feel better about yourself. That warm feeling just might be the problem.

So, I’m still waiting for the $2500 per year ObamaCare is supposed to save me. In the meantime, here are some other numbers that are, instead, grounded in what we often refer to as reality.

It will cost the federal government – taxpayers, that is – $50,000 for every person who gets health insurance under the Obamacare law, the Congressional Budget Office revealed on Monday.

The numbers are daunting: It will take $1.993 trillion…to provide insurance subsidies to poor and middle-class Americans, and to pay for a massive expansion of Medicaid and CHIP (Children’s Health Insurance Program) costs.

Offsetting that massive outlay will be $643 billion in new taxes, penalties and fees related to the Obamacare law.

That revenue includes quickly escalating penalties – or ‘taxes,’ as the U.S. Supreme Court described them – on people who resist Washington’s command to buy medical insurance.

Remember what I said earlier on during the debate over ObamaCare; government predictions of cost should be regarded as a minimum. And I should add, predicted savings should be laughed off as the PR move they are. Unless you are truly cutting programs and spending, costs go up.

More free stuff that isn’t free. If you’re paying attention, there’s a pattern here.

Filed under: Economics & TaxesEntitlementsGovernmentHealth Care