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Obama, the Democrats and the liberal hate spewing clueless MSM were applauding the compassionate extension of benefits for the unemployed this week. This is about the 400th extension of benefits in the last two years. The Democrats can now portray themselves as the compassionate party of the people. The Republicans who voted against the extension are evil slime who want the unemployed to starve and be thrown out of their McMansions. They might even request that they give up the lease on their BMW.

Fake compassion is why we have a $13.2 trillion National Debt. Politicians care by spending money they don’t have in order to win votes. Get it? Obama went before the American people and proclaimed that the Pay As You Go Rules had been reinstated and would keep Congress from spending money they don’t have. If you choose to spend on one area, you cut the exact amount from another area.

The $34 billion for this extension is unpaid for. What happened to Pay As You Go? It is being borrowed from the Chinese and the bill + interest is being handed to our future unborn citizens. Our politicians will never run out of compassion if it gets them re-elected. They think the money is unlimited. They are fools and knaves.

Here are the hard facts. Extending unemployment benefits increases the unemployment rate. The Federal Reserve did a study and the facts are:

  • “We calculate that, in the absence of extended benefits, the unemployment rate would have been about 0.4 percentage point lower at the end of 2009, or about 9.6% rather than 10.0%. Despite the relatively minor influence of extended UI, it is important to note that the 0.4 percentage point increase in the unemployment rate represents about 600,000 potential workers who could become virtually unemployable if their reliance on UI benefits were to continue indefinitely. This in turn would raise the minimum attainable unemployment rate by a similar amount, a problem that has been noted as an outcome of the generous UI systems in some advanced European countries.”
  • The check that we’re sending the unemployed came from somewhere. They came from the taxes of other people who are for the most part employed. So if transferring money to these people who are unemployed helps stimulate the economy, then taking it away from the people who are paying the taxes to pay for it de-stimulates the economy. Overall it’s hard the see how that is on net a beneficial thing. More broadly, the fact that we’re consistently trying to promote sort of redistribution in helping people rather than trying to create rules and a system which is productive gives the private sector pause. It makes the private sector think we’re not getting the deficit and the debt under control. It makes them think we’re not worry about productivity. That’s in the long term much worse for people having jobs and being employed than the temporary aspect related to the recession.
  • The broader thing is it creates the wrong incentive. There’s clear evidence that people who are unemployed tend to leave unemployment just before their unemployment benefits run out. It’s not just a question — it’s not the right way to think about it — are there jobs? The right way is are there jobs at what wages? If people lower their wage demands, if they offer to take say their old job for 50 percent of what they were getting, there would be a lot more jobs out there. That’s the adjustment that needs to happen in many cases. But unemployment insurance and especially very, very long-term unemployment insurance impedes that kind of adjustment.

Enough compassion and mistruth. We’re F$#ING BROKE!!!!!!!!!!!!!!!!!!!!!