Social Question

jerv's avatar

How does cutting unemployment benefits help the economy?

Asked by jerv (31076points) July 6th, 2010

I understand that letting the unemployment benefits expire will reduce government spending (and therefore the budget deficit) in the short term, but won’t reducing/eliminating income for millions of people result in reduced consumer spending and cause more problems like more jobs lost due to lack of consumer demand than it solves in the long term?

And if many of the people who are no longer collecting unemployment wind up on food stamps, how much money is the government really saving?

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16 Answers

Dr_Lawrence's avatar

Nope it undermines economic growth and punishes families who want to be working as soon as the opportunity appears.

PandoraBoxx's avatar

It’s been argued that people on unemployment take longer to get back to work because they will try to find a job that matches their skill set, as opposed to taking any job, just to get back to work. Being on unemployment doesn’t really help consumer spending, but it does help keep the rent/mortgage paid.

jerv's avatar

@PandoraBoxx Given the number of cleaning, delivery, stockroom, warehouse, and other low-paying “grunt” jobs I got passed over for, I have to wonder how far out of touch with reality those people are. Yeah, it would’ve been nice to get what Machinists generally earn, but it took me a year to land a job that pays less than half that.

Dutchess_III's avatar

Well, I know of at least three people who’ve spoke of “riding the unemployment gravy train till it runs out.” In other words, three people who’d get their butts back to work if it wasn’t for the unemployment “gravy train.”
Late, at always, but what @PandoraBoxx said.

mrentropy's avatar

I dunno. The last time I was unemployed I got passed over for jobs because I was “over qualified.”

jerv's avatar

@Dutchess_III True, there are always some of those, but would you say that that is universal like some people claim it is? After all, we all know that everybody on welfare is a crack-smoking baby factory.

Are we going to let an abusive minority ruin things for everyone?

@mrentropy I got a lot of that too. Hell, the job I have now was almost denied because I earned >$11/hour at least once in my life!

DocteurAville's avatar

I don’t know. Is that a REP idea? I guess it is, they ignored the vote on extending unemployment benefits few days ago, along with whatever else congress come up with.
Anyhow, I gave up looking for a job. There are none for me in my area. I was thinking to relocate to Dubai. I am kind of trying to find a way to tell this one idea to my spouse…

dpworkin's avatar

It’s completely retrograde, but the purpose of stalling the bill was to score political points against Obama, and to hell with the victims.

Dutchess_III's avatar

@jerv I know. I’ve been “On welfare” (K, food stamps and medical for the kids,) so I know that sterotype isn’t true. However, I’ve also been on unemployment during a time when I really wanted to be a stay-at-home Mom, and I worked it. Worked hard at being a homemaker, and got paid. At least, I guess, I had another agenda in mind other than going fishing and just hanging out. So, take that in conjunction with the three people I know that are ON unemployment and actually SAID that to me….IDK…..

@dpworkin Are they EVER going to leave him alone?? Is it all because he’s black, do you think?

jerv's avatar

@Dutchess_III Maybe it’s just my Yankee work ethic. Between living in Orlando, San Diego, and now here in Seattle, it’s slowly dawning on me that there actually are lazy people out there, and it blows my mind.

@dpworkin Well, homeless people who are more likely to vote Democrat can’t vote, so between that and people becoming disillusioned enough with Congress to not bother showing up at the polls, I can see how the GOP might benefit since low voter turnout generally favors them.
On the other hand, it may cause a backlash and give the Dems an even bigger majority in the next election, though I see that as less likely.

jrpowell's avatar

“The measure would provide up to 99 weekly unemployment checks averaging $335 to people whose 26 weeks of state-paid benefits have run out. The benefits would have been available through the end of November, at a cost of $33.9 billion. There were no offsets in the bill, so the cost would have added to the budget deficit.”

That is about a quarter of a single percentage point of our yearly expenditures. And 90% of that money will be pushed back into the economy in days. And that money will be taxed as income so some will flow back to the Federal Government.

The Republicans don’t give a single fuck about the deficit. Do you think they would fight a 34 billion tax cut on people making over a million per year. They simply want to fuck the economy so they can get unhappy voters that blame Obama. They are scum.

Program cost: US$65 billion

Rufus_T_Firefly's avatar

It would be terrific to find a job for which you already possess the proper skill-set or training, but if you don’t have another job lined up your only choice is to file for unemployment and continue your search as if it were a full-time job. If the time finally arrives that you are forced to accept a less-lucrative job, you further risk endangering your financial livelihood by taking that lower-paying job, which can be as bad for you as it is for the economy. Unemployment won’t cover mortgage payments and probably not most car payments, so it makes sense to search, at least in the beginning, for jobs where you are already a good fit. Training and re-education programs aren’t cheap either and unemployment certainly isn’t enough to cover that. When you combine those facts with ageism and other currently existing forms of discrimination, the odds of finding a job in our current economy go down quite quickly.

The Republican morons who voted down this bill should be ashamed of themselves. Theirs is an elitist attitude which they usually express by clever use of that well-worn-out conservative catch-phrase ‘I got mine, go get yours’. It’s the mantra of opulent misers and uncaring assholes which rewards no one and punishes honest hard-working people of every stripe whose only transgression was being unfortunate enough to lose their job. Everyone who files for unemployment is acutely aware that such aid won’t last forever and most use what little they get to cover bare necessities and eke by while actively searching for another job. Sure, there are a few bad apples, but you can say that about any group of people and I’d much rather invest in people’s futures than waste money on previously-rich Republican representatives whose only interests involve lining their own pockets with the difference that might be saved.

ETpro's avatar

Will cutting unemployment benefits for 1.4 million this month and up to 3 million in the near term cut consumer spending and cause a new wave of perhaps a million foreclosures> Of course it will. Will it stop the recovery? Almost certainly. And that’s what is so beautiful about it. Republicans get to drive the economic recovery off the rails, but can leave all the blame at Obama and the Democratic Congress’ doorstep. Of course it is only brilliant if you care only about partisan success, and not about American success.

Dutchess_III's avatar

@jerv I know. It’s depressing!

DocteurAville's avatar

” On the other hand, it may cause a backlash and give the Dems an even bigger majority in the next election, though I see that as less likely. ”

I am new to this; politicians who:

1) Don’t do their jobs [represent you]
2) Voters who do not know [...] to whom vote for
3) “This is he best there is in the world…”

Come November, take you ass to the polls and fuck these assholes, bitches !

Remember Paulson right up before the end; he said: “The end is near, unless…”

Dutchess_III's avatar

I think it helps because losing unemployment benefits lights a fire under people’s butts to go get a job now.
With the most recent unemployment issues, where Obama extended it past the standard 6 months, the unemployment rate went down in direct proportion to the employment benefits ending.

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