If helping the maximum number of people with the least amount of spending is a liberal agenda (and it is) extending unemployment surely qualifies.
Extending unemployment insurance is the fiscally responsible thing to do
Some numbers: About 7.8 million jobs have been lost since the recession began in December 2007. Over that same time, the country should have been adding about 100,000 jobs per month or about 2.9 million in total, just to keep up with population growth. As a result, today the United States is short 10.7 million jobs. Shierholz said the April jobs report showing 290,000 new jobs was very good news, but that much more was needed. “Even if we add 290,000 more jobs every month, it will take five years to return to the pre-recession rate of unemployment.”
The so-called cost Rothstein referred to was not the actual cost of unemployment benefits but what critics have often argued is a disincentive cost, which effectively discourages unemployed workers from looking for jobs. Contrary to that argument, he stressed that even in more normal economic times, research has found only a slim disincentive effect. In times of severe jobs crisis, there is good reason to think that extending unemployment insurance actually increases job search efforts, since in order to qualify for benefits, a person must be actively looking for a job. “The shortage of job searching is not the problem,” he said. “The problem is a shortage of jobs.”
“A high fraction of the unemployed who lose their benefits will end up out of the labor force,” he said noting that many of these discouraged workers apply for permanent Social Security disability. Once on disability, very few workers re-enter the labor force. Therefore, providing UI can be fiscally responsible, argued von Wachter.
When you give $1 to people who have lost their jobs and they have run out of savings, those dollars get spent. So Mary gives it to Mike down the street to buy some of his fruits and vegetables. Mike, who relies on customers like Mary, might put 25 cents in the bank but use the rest to buy seed and fertilizer from Tom's store in town. Tom might save a dime of the 75 cents he got from Mike but use the remaining 60 cents for a new pair of glasses.
When economists calculate the gross domestic product, they add up all those transactions (excluding the amount set aside in savings and money that ends up overseas if you buy foreign goods). In this limited example, Mary's $1 has added $2.35 ($1 plus 75 cents plus 60 cents) to the gross domestic product. Yes, it's still just $1, but by passing it along it has helped three people.
I guess in recap making the world a safer place and helping Americans is the liberal agenda. Yay for us!
