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Archive for February 20th, 2012

I confess to being monotonous and repetitive when it comes to explaining that America’s fiscal problem is too much spending, and that debt and deficits are simply symptoms of that underlying problem of excessive government.

But no matter how often I repeat myself, the message isn’t sinking in – even among people who should know better.

That’s why I’ve created the “Bob Dole Award.” I’m hoping that a bit of well-intentioned moral suasion may convince people (at least the ones who presumably are on the right side) to be a bit more careful with their rhetoric.

The first winner of this (hopefully uncoveted) award are the Republicans of the House Ways & Means Committee.

These are the GOPers with the most influence over both tax and entitlement policy, so it’s very important that they understand the real problem and properly communicate with the outside world.

Unfortunately, even though the Committee normally produces good material, they messed up last week when sending out information about Obama’s big-spending budget proposal.

They issued a press release entitled “More than twice the debt in half the time,” and the document (also pasted to the right) accurately shows how red ink has exploded during the Obama years.

But a statist organization, left-wing lobby, or some other pro-big government entity could put out exactly the same press release and make it part of an argument for higher taxes.

After all, most leftists don’t openly admit that they want higher taxes to make government bigger. They always hide behind the fig leaf of “deficit reduction.” Needless to say, any additional revenue almost always is used to expand the burden of government spending.

I’m not sure whether the Bob Dole Award should be accompanied by a “shame on you” or a “tsk, tsk,” but the Ways & Means Republicans deserve a slap on the wrist (or kick in the rear, depending on your disciplinary style).

Correction: A Democrat friend emailed to point out that there was a factual error (as opposed to an error of judgment) in the GOP press release. And it’s one I should have noticed since I made the same point back in 2009, which is that the FY2009 budget began on October 1, 2008 and should be blamed on President Bush.

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I’ve written periodically about the perverse incentives of the unemployment insurance system. Simply stated, there will be fewer jobs if the government subsidizes joblessness, and I even showed that this is a consensus position by citing the academic writings of left-leaning economists such as Larry Summers and Paul Krugman.

The San Francisco Federal Reserve also has produced research measuring the negative impact of unemployment insurance on the job market.

Now we have some additional academic research on the topic, and the results once again show that the unemployment insurance program causes a significant increase in unemployment.

The Emergency Unemployment Compensation program created in the summer of 2008 provided for unprecedented extensions in the duration of unemployment insurance (UI) benefits. Combined with persistent high unemployment and historically long durations of unemployment during the 2008 and 2009 recession, this extension of UI has prompted renewed interest in the impact of UI benefits on job search, the duration of unemployment, and the unemployment rate. …This paper uses multiple regression analysis to estimate the impact of extended UI benefits on the unemployment rate after controlling for the severity of the recent recession. The extension of UI is found to have a positive and significant impact on the national unemployment rate… The UI benefit extensions that have occurred between the summer of 2008 and the end of 2010 are estimated to have had a cumulative effect of raising the unemployment rate by .77 to 1.54 percentage points.

If you’re trying to educate a statist friend or colleague about the relationship between unemployment insurance and joblessness, this research should help. But you may also want to share this real-world story. And here’s another powerful anecdote.

Last but not least, this cartoon does a very effective job of showing the consequences of paying people not to work.

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