How To Extend Unemployment and Have It Cost Less
Obama’s “Jobs” bill includes money for people to remain jobless. Their theory is that money thrown at the jobless is the best use of stimulus, umm, forget that, umm let’s try “magic money making”. Unfortunately their theory is wrong. The CBO has already opined that every dollar spent in that program only returns 90 cents to the economy.
Not that Liberals care; the real reason to include this provision in a Jobs bill is so that Democrats can wag their fingers at Republicans and dare them to turn down the money. The images of starving children would soon replace Grandma getting thrown off the cliff.
BUT… We do not have to live in a “this or that” world. I implore Conservatives and Republicans to offer a new idea.
Instead of raising the unemployment insurance beyond any amount that was collected in premiums, let us reduce the unemployment insurance to 26 weeks, as it was before the crisis, and continue to pay the amount after 26 weeks as a loan.
We are all aware that 80 percent of unemployment claimants find work in the last three weeks of their benefits. This is not because they are all scamming the system, some are, and others feel they have the luxury of holding out for a better offer, and yet others will not take that job working for their father-in-law unless they have to.
On average, these claimants have paid into the system and should receive the first 26 weeks without surcharge. But facing additional debt after 26 weeks, most will settle for the job they can find, or feel the pressure to start that company on their own, or move into Mom and Dad’s basement when the benefits run out. This will result in making them part of productive, tax-paying America, and snatch them from dependent tax-absorbing America.
For the small percentage who, for whatever reason, would not be able to find a job, and had nowhere else to turn, they could agree to keep the unemployment going, provided that when they got a job, they would pay a 10 percent surcharge on their taxes, to be administered by the IRS, until the loan amount plus interest was paid off.
Indeed, there would be a few who would never get out from under. They would be very few. Most of us adjust, learn new skills, move and find a way. When extended recipients do that, they will pay back to society, that which they had to borrow. We the tax payers would be giving them a hand up and not a hand out.
The difference this plan would have on the cost of unemployment benefits would be staggering. The recipients would self-filter. Some might borrow from Uncle Joe, because he would never charge his niece interest. Others might rely on the other spouse’s income for a while, because they are hoping to avoid a tax surcharge. It is likely that the vast majority of those still unemployed by the end of 26 weeks would not opt to continue payments because it would be better for them to use networking, and family than incur a debt that would be collectable by the IRS.
This idea is pragmatic, inexpensive and creates the right kind of optics for Conservatives, Republicans and Americans. If this change can be made, it can be applied to healthcare as well.
The current system does nothing to encourage independence from the entitlement, and simply allows the continued payment to everyone who lost a job as part of a political class. As recipients pass 50 weeks, their skills are so deteriorated, they become almost unemployable. This is a travesty to the tax payers, the beneficiaries and a government that should offer a safety net that doesn’t look like a pillow topped mattress.
Please give me some feed back. How can Democrats stand in the way of this? Why hasn’t this been done already? Are we ready for these kind of adult solutions?