Griper Blade: Who Cares About the Unemployed? We've Got an Election to Win!

As congress returns from the Fourth of July recess, they'll try once again to extended unemployment benefits for 2.14 million citizens whose benefits have run out. The problem here is Republican grandstanding -- with the unfortunate Democratic Sen. Ben Nelson joining in -- on the deficit. But the amount of money the extension of these benefits would add to the deficit is so miniscule and the stimulative effect of unemployment benefits are so great that it's hard to make any sense of the GOP's argument here. It's like saying, "Yeah, we could buy this new tractor and increase productivity on the farm, but it's a penny more than I'm willing to pay, so we're just going to have to lose all that profit." It makes no sense at all.

Part of the Republican defense is that extending unemployment benefits extends the amount of time people remain unemployed. But this is a crazy argument that assumes all situations are equal and that there are plenty of jobs out there waiting to be filled. There aren't. Economist Paul Krugman explains:

Do unemployment benefits reduce the incentive to seek work? Yes: workers receiving unemployment benefits aren't quite as desperate as workers without benefits, and are likely to be slightly more choosy about accepting new jobs. The operative word here is "slightly": recent economic research suggests that the effect of unemployment benefits on worker behavior is much weaker than was previously believed. Still, it's a real effect when the economy is doing well...[CLICK TO READ FULL POST]