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Vin Suprynowicz
The handouts just keep coming
A rather heated debate seems to be ensuing — it ensues about every 90 days, merely growing louder at each iteration — about whether the Congress should again extend benefits for the unemployed.
The question that draws the most attention, understandably, is whether this is a good idea. As usual, though, I’d like to focus instead on a supposedly minor, related concern.
For the record, I understand most of the unemployed are out of work through no fault of their own, and that finding a job during this government-exacerbated recession — especially one paying an income near that to which the wage-earner had become accustomed — is a nasty and difficult undertaking.
I also understand that unemployment insurance, as generally constructed, does a much better job of “making whole” the $15,000-a-year worker than the $75,000-a-year worker — something that ought to be fixed.
I was “on unemployment” myself, several times, in my younger days. The rigmarole our government masters put us through in order to prove we were legitimately seeking work was as absurd as most government undertakings. Like magic, however, most of us tended to find a new job — even if it wasn’t our “first choice” job, at “first choice” pay — on a date curiously close to the date when our unemployment insurance benefits were scheduled to expire.
Today, the taxes and regulatory burdens set by government on any private business attempting to create a new job are so onerous (What will my health insurance obligations be? What could the ADA cost me? I have to withhold and match payroll taxes, on penalty of imprisonment, how often?) that it’s a miracle anyone finds work — other than “under the table” work, where there sure ain’t no benefits.
Nonetheless, the macroeconomic truth is that continuing to hand money to people as compensation for being unemployed — while artificially propping up wages and prices at inflated levels — merely prevents the needed economic correction. The best way for the nation to recover from the misallocation of resources caused by real estate and stock market “bubbles” would be to slash government taxes and regulations, allowing both existing businesses and new entrepreneurs to hire all kinds of people at much lower starting wages, without even bothering to tell the government what they’re up to.
None of which is my main point today.
My main point today is: Why do we let them get away with calling this an “extension of unemployment benefits”?
When you take a regular, above-ground, “payroll withholding” type job (of which on these shores there are going to be fewer and fewer, and eventually none other than for unionized bureaucrats, for which you can thank the statists with their endless taxes and add-on mandates), your employer pays unemployment insurance premiums on your behalf.
As with any insurance policy, the benefit, should it be triggered, is known in advance. The rates for that insurance policy are set by actuaries, who study and calculate the chances that X number of workers each year will find themselves unemployed for as many as 13 weeks, or 26 weeks, or whatever level of temporary income loss the insurer is agreeing to cover.
When Congress says, “Hey, pay them for 39 weeks. No, we changed our minds, pay them for 52 weeks. No, no, for 78 weeks,” do they send the actuaries scrambling back to increase the premiums now being charged employers of existing workers, so that the income drawn from those premiums will now cover 78 weeks of unemployment benefits?
I don’t think so. I don’t think they’re “extending unemployment benefits,” at all. I think these are just cash handouts — income transfers from the taxes of those still working, without regard to the premiums collected in the past.
Imagine I total my car. My insurance company tells me it was worth $5,000 (that’s high — you haven’t seen what I drive), and that a $5,000 payment is thus all they’ve contracted to pay me in exchange for those premiums I’ve been sending in all these years. I accept their $5,000 check. Then, the next month, I call my congresscritter and say, “Times are tough. I’d like to have my auto collision insurance extended. Please send me another $5,000.”
Assuming my congresscritter is an economic idiot (is that a stretch?), he or she says, “What a great idea. People are suffering. People who vote. I can make myself popular. Let’s dig into current tax receipts and mail everyone whose car was wrecked last month an extra $5,000.” Pretty soon I’m calling my congresscritter every month, and getting another $5,000 from the government every month.
It sure helps. They’ve bought my vote — and my silence. You think I’m going to squawk and risk ruining this deal? But is this really an “auto collision insurance extension”? My insurance company got done paying me what it had contracted to pay me, long ago. If the government were really forcing GEICO, or Travelers, or State Farm to send all their recent past claimants an extra “total value” check every month, those firms would soon be bankrupt. Why aren’t the folks who administer the unemployment insurance policies bankrupt?
Because I don’t think that’s what’s happening. I think the government is just printing money as fast as it can, and sending it anywhere it can think of, to keep everybody off their backs while they try to figure out which wacky new bailout or slush fund to try next.
Problem is, that’s not speeding up the needed economic correction. It’s pushing it off indefinitely, while inflating the currency into something more closely resembling Monopoly money. Let’s just call things what they really are — that’s all I’m asking here. Once you’ve been paid the maximum benefit calculated when the actuaries set the premium rate for your “unemployment insurance,” there’s no way to extend those benefits, no matter how nice that makes things sound.
This hush money is coming from somewhere else.
Vin Suprynowicz is assistant editorial page editor of the daily Las Vegas Review-Journal, and author of “Send in the Waco Killers” and the novel “The Black Arrow.” See www.vinsuprynowicz.com/.
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To all you liberal Obama Zombies, would you REALLY like to see less unemployment????? Get rid of the minimum wage law. Problem solved.
@L.L-
Look at the wall above and behind you. That big splotch is the point of this column.
What is not mentioned is that with over 8 million people unemployed if you cut off the unemployment checks you could have chaos. You will have more home invasions, bank robberies,more homeless people. I am not saying that the people on unemployment are bad people. What I am saying is if there is no money for food or lodging good people will turn to desperate measures.
There are more people unemployed than there are jobs. There is such a disconnect as to what is really going on out here,it's easy for people with jobs to pass judgment on people getting unemployment and say stop the unemployment but if your the one getting unemployment and that is your only thing keeping you from being homeless it's a life line.
I would rather see a bailout of the people than a bailout of banks and corporations . Imagine if all the bailout money was given directly to taxpayers . How would our economy be now ?
@msanonymous222:
Well, well, well, how stubborn can you be? But, anyway, I'm going to let you have the last word.
Who out there is living on unemployment? Are you clearing $1200 a month? How are you living on that paltry sum? It's similar to welfare, and social security payments. Just enough to live like a slave. More proof that government solutions DON'T WORK. Hello, people?
The fascist/globalist banksters created the Great Depression through the manipulation of the money supply, and this time they've used the derivative market to create the bubble that they knew would burst. They used NAFTA and GATT to export American manufacturing jobs, they use unconstitutional legislation to strangle American companies with regulations. They have created a system to trap all of us into government dependency, so that we will obey. It's all a game, planned out well in advance. Our unconstitutional wars serve as circuses to entertain, while our welfare system provides the bread. As the fedbots stand by and watch the oil poison the Gulf, preventing individual states from acting, and destroy more jobs, even more people will be made dependent. The oppressive fascist system that now overlays our Constitutional Republic is speeding up our fall into total tyranny. Will we determine the solution before it's too late?
@justanotherbrick: I read your comment word for word. I stand by what I said. I said there's no Tier V legislation. I said state DOLs can and may give incorrect information. And I said maybe you shouldn't associate with a certain someone ("this person", one person, singular). By the way, you're not the only one of the two of us with an education and a career in an English-related field. You only think that you are.
The longer comment finally went through.
(I posted a longer comment, but the filter wouldn't let it through.) Congress must immediately pass the extension of the Temporary Emergency Unemployment Compensation Program. This is an URGENT EMERGENCY for millions of jobless Americans and their children.