There’s only one reason nearly 2 million American former workers are without unemployment benefits today: Senator Reid (D-NV) and his Democratic colleagues’ addiction to deficit spending. The Senate is expected to try to extend these benefits soon. There are arguments pro and con, but if the benefits are extended, then the $34 billion cost should be paid for with spending reductions elsewhere. Surely in the great mass of over $3.5 trillion in federal spending built up over the years and to which President Obama, Reid, and Speaker Pelosi (D-CA) have diligently added, they can collectively find something of lesser import to cut.
Why extend these benefits? Not because of their beneficial effects on the economy, of which there are none. To argue otherwise is to accept fiscal alchemy whereby instead of turning lead into gold, the government tries in vain to turn debt into prosperity.
The only substantive argument for extending the benefits is on humanitarian grounds. By his own original reckoning, Obama’s economic policies have made a hash of the recovery. The unemployment rate continues in the upper 9 percent region, and Obama’s own optimistic economic forecast projects it to remain there in 2011. Recent attempts to paint a happy face on the jobs picture by the President’s Council of Economic Advisors have been roundly met with the guffaws they deserve.
With high unemployment and a floundering recovery, one can argue on simple humanitarian grounds to act to extend unemployment benefits. However, if the benefits are extended, then policymakers should come together now and agree to continue to extend those benefits until some agreed-upon metric of labor market strength is reached, such as the unemployment rate falling to 9 percent or even 8 percent.
Policymakers should also agree, here and now, to offset the costs of any extended benefits by cutting spending elsewhere. No, the amounts involved will not change the course of America’s financial history. But the old proverb still holds: A journey to erase a $1.5 trillion budget deficit begins with a single step of fiscal responsibility. Senator Reid and his colleagues should break their addiction to deficit spending and offset with other spending reductions any legislation to extend unemployment benefits.