The debt Democrats are piling up hasn’t fixed the economy. Obama administration policies have only delayed recovery and increased unemployment.
According to the Bureau of Labor Statistics‘ Household Survey, the number of people employed fell by 301,000 in June. While the unemployment rate declined by 0.2 percentage points, it did so only because 842,000 Americans simply gave up looking for jobs and left the labor force altogether. Given such widespread frustration, it’s hardly surprising that only 29 percent of Americans say the Obama stimulus has helped the economy, according to a Rasmussen poll.
Don’t try explaining these dynamics to House Speaker Nancy Pelosi, who stammered that paying unemployment insurance “is one of the biggest stimuluses to our economy.” In her confused way, the speaker explained that providing unemployment benefits “creates jobs faster than almost any other initiative you can name. Because again, it is money that is needed for families to survive, and it is spent.”
By Mrs. Pelosi’s measure, life must be pretty good out there. Last year’s $787 billion stimulus bill extended unemployment insurance to 95 or 99 weeks, with the longer benefits available in states with unemployment rates exceeding 8.5 percent. Without this extension, most states would provide 26 weeks of benefits. The stimulus also increased the size of the benefits. Such policies create disincentives to working because record-long benefits undermine the urgency to find a job. Subsidized unemployment causes more unemployment.
Longer-term benefits expired last month as Democrats tried to ram through a bill to continue them that was packed with deficit-busting pork projects, which proved too risky for members panicking about losing their seats in upcoming elections. Diminishing unemployment benefits will do more to lower the unemployment rate than anything Democrats have done in the past 1 1/2 years of stimulus spending. Removing extra unemployment benefits alone should reduce the unemployment rate by at least 1.5 percentage points, according to a very conservative estimate by JPMorgan Chase.
Curtailing federal interventionism is necessary for a turnaround. Employers cannot make long-term plans and are afraid to hire more workers when constantly barraged by expensive new government programs. Deficit-spending simply won’t stimulate the economy.
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By Jay Sekulow
The left's outrage over the IRS turns to a plea to 'move on'