Here’s Paul Krugman in this morning’s NY Times:
Influential people in Washington aren’t worried about losing their jobs; by and large they don’t even know anyone who’s unemployed. The plight of the unemployed simply doesn’t loom large in their minds — and, of course, the unemployed don’t hire lobbyists or make big campaign contributions.
So the unemployment crisis goes on and on, even though we have both the knowledge and the means to solve it. It’s a vast tragedy — and it’s also an outrage.
True, the unemployed don’t hire lobbyists, they don’t need to. Keynesian ideology and political aspiration inspire all the lobbying they could ever need. Keynesians are consumptians — it’s all about spending. Therefore (by their way of thinking), if we’re to suffer low single-digit economic growth into the far reaches of tomorrow, I suppose unemployment benefits should be treated like QE3 — no expiration date.
To be fair, Krugman does understand the unseen cost of high unemployment:
When willing workers endure forced idleness society as a whole suffers from the waste of their efforts and talents.
While some forever-aspiring politicians don’t:
Let me say that unemployment insurance… is one of the biggest stimuluses (sic) to our economy. Economists will tell you, this money is spent quickly. It injects demand into the economy, and it’s job creating. It creates jobs faster than almost any other initiative you can name. -Nancy Pelosi
Hey, here’s an idea; how about we extend unemployment benefits until the unemployment rate drops to some number, like 3%, then back them off to say 26 weeks? And, until we get there, we’ll need to build in an inflation factor to make sure we get the all-necessary continual growth in consumption. Besides, subjecting someone to a potential lifetime of demotivation without compensating for inflation would be heartless. And don’t sweat the perpetual deficit spending, Krugman already has that one figured out:
Remember, the U.S. government can’t run out of cash (it can print the stuff)….
Now that’s an outrage!
In the end it’s very simple:
If you pay people not to work and tax them when they do, don’t be surprised if you get unemployment. -Milton Friedman