My must read of the day is "How to Keep Workers Unemployed," in the Wall Street Journal:
Maybe it's time to consider whether the big expansion of unemployment insurance has increased joblessness. In 2009, the Obama administration and Congress extended jobless benefits for up to 99 weeks. The point was to help people through the recession, but now the jobless rate is 7 percent, down from 10 percent, and the White House still wants another extension.
That would add some $25 billion to the deficit with no compensating economic benefit. The administration claims that every $1 of jobless benefits creates $1.80 in economic growth, based on the notorious "multiplier" in Keynesian economic models. This is the theory that you can increase employment by paying more people not to work, and that you can take money out of the private economy by taxes or borrowing without cost. If that theory worked, the government should pay everyone not to work. […]
Instead the current system provides as much as two years of benefits for not working and raises payroll taxes on employers even as some 20 million Americans are still unemployed, underemployed or discouraged from looking for work. None of this will help the economy create more jobs, which is what the jobless need far more than another government check.
Still, if you looked at the most recent jobs report, the fact is there are 1.5 million fewer jobs than before the recession.
Would it not be wise to make the extension contingent upon adding additional options for those receiving these benefits, instead of just handing out money? There are various ways to do this, and economist Michael Strain outlines many that are worth considering in the current Weekly Standard.
You don’t have to require everyone to take one of the alternate options, but why not let them choose between, say, just taking the money or using it as relocation assistance to move to a more prosperous job market.