"Obama: Cutting Unemployment Benefits Could Cost 1 Million Jobs"

Chalk this up that Obama doesn't have a clue about economics, example number . . . . Well, I have lost count. Now this notion again on Monday, just like Pelosi before, that unemployment benefits create jobs. The problem is that Obama really believes this:

"We should continue to make sure that if you're one of the millions of Americans out there looking for a job you can get the unemployment insurance that your tax dollars contributed to. That will also put money in people's pockets and more customers in stores. In fact, if Congress fails to extend the payroll tax cut and the unemployment insurance benefits that I've called for, it could mean one million fewer jobs and half-a-percent less growth. This is something we could do immediately. Something we could do as soon as Congress gets back."

The discussion that I offered before for Pelosi applies equally well here.

UPDATE: Carney gets asked about how new unemployment benefits could create 1 million jobs. A video is available here. Wall Street Journal's Laura Meckler had this exchange with Jay Carney at Wednesday's WH briefing.

Q I understand why extending unemployment insurance provides relief to people who need it, but how does it create jobs?

MR. CARNEY: Oh, it is by -- I would expect a reporter from the Wall Street Journal would know this as part of the entrance exam just to get on the paper -- (laughter.) But the -- no, seriously. It is one of the most direct ways to infuse money into the economy because people who are unemployed and obviously aren’t earning a paycheck are going to spend the money that they get. They're not going to save it; they're going to spend it. And unemployment insurance, that money goes directly back into the economy dollar for dollar virtually. So it is -- and when it goes back in the economy, it means that everywhere that those people -- everyplace that that money is spent has added business. And that creates growth and income for businesses that then lead them to making decisions about job -- more hiring.

So there are few other ways that can more directly put money into the economy than providing unemployment insurance.

Q And why since it's been extended have we seen unemployment not drop, in fact?

MR. CARNEY: Well, look, this is "what would have happened" argument. But we have seen is, what is it, 2.4 million private sector jobs created. And this year there’s -- I mean, again, this is not just -- I encourage you, and I know that you all have good contacts in that world, but economic analysts wholly unaffiliated with this administration would tell you, and told you back late last year, that the combination of the payroll tax cut and extension of unemployment insurance would have a direct, measurable impact on job creation, so that of the jobs created this year, a certain number -- however many tens or hundreds of thousands of jobs -- can be attributed to those actions taken and pushed by the President last year, which is why he feels so strongly they ought to be done again as we continue to emerge from this recession.

So that's why he believes very strongly we ought to extend the payroll tax and extend unemployment insurance.

Q And is the best argument that you can put forward to people for these things that if we do this again, it won’t necessarily get any better, but it won’t get any worse --

MR. CARNEY: Laura, you know that's not how it works. You know that we have to do a variety of things to grow the economy and create jobs. This is one thing that economists of all stripes agree will directly affect growth, and a half percentage point, I believe, in growth is what economists estimate the payroll tax cut would provide. Is it half? Plus the UI? Something like that. Anyway, there’s -- and up to a million jobs. So we do that, and we have that positive impact next year.

That doesn't mean that's the only thing we do. And obviously, there are other economic factors that, as we’ve seen this past year, some which we can control and some we can’t. I mean, we can’t -- we cannot estimate what a natural disaster that might happen next year, what impact it might have on the global economy. But we can take action that does have a direct impact. . . .

Now the same thing is being claimed for food stamps.

See also this discussion.

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Blogger Suburban said...

I had to do a double take when I saw the title of the post.

Does it really say that? That can't be right.

But that's what it says.

Call Ripley's. That's crazier than a lot of things in the "Believe It Or Not" museums.

If I hadn't voted for the other guy, I'd firmly slap my forehead, and hang my head in shame for a couple hours.

8/10/2011 1:26 AM  
Blogger Chas said...

Markie Marxist sez: "We Marxists are adept at standing the truth on its head - not only do we bring considerable experience to the task, but we've also had a great deal of practice lately."

8/10/2011 9:28 AM  

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