A recent CBO report estimates that extending federal unemployment benefits through 2013 at the 47 week eligibility mark would create roughly 300,000 job at a cost of $30 billion. So let me get this straight, taking money from people who work, and giving it to people who don’t work would create 300,000 jobs. Essentially the CBO is saying that paying people not to work is going to create 300,000 jobs. The funny thing about this is that no liberal leaning article mentions the fact that based on the simple calculation of dividing the additional $30 billion expenditure by the number of jobs that would be created (300,000) you get $100,000. So effectively, the government would create 300,000 jobs at a cost of $100,000 per job in exchange for paying people not to work. It is true that the unemployed receiving the extended benefits will likely spend this money on food, clothes, shelter, etc. But let’s think about this for a moment. Most of these jobs that would be created or “saved” would likely be food service, retail, etc. Unemployment is paid so people can get by, not buy new cars, and houses, or spend on professional services. None of the employees working these jobs that will be created will be making $100,000 annually. But yet it is going to cost the federal government $100,000 to create each one of the estimated 300,000 jobs by extending unemployment benefits in 2013. Just another example of how inefficient the federal government is. They are going to spend $100,000 per job, to create what will likely be a majority of minimum wage jobs, and we all know it will never create 300,000 jobs, and will likely cost much more than $30 billion.
This is one of my favorite parts of the article:
“Those options to extend UI benefits would have several effects on individuals and the U.S. economy in the short run. In particular, they would….Provide incentives for UI recipients to REMAIN UNEMPLOYED LONGER than they otherwise would have because UI benefits stop when recipients find a job or stop looking for work.”
At least they are honest about this one.