Published: November 30, 2010
Lehigh Valley Live

Unemployment extension must be granted; it's the right thing to do and it makes economic sense

By Tony Rhodin | The Express-Times

The politicians are playing politics again with extending unemployment benefits.

For those of you who are employed and not paying attention, on Wednesday, the government's ability to extend unemployment benefits for 73 weeks for people who have already used up their initial 26 weeks will go away. In an economy where there are five unemployed people for each job opening.

So, why does this matter to the employed? The Associated Press reports that every dollar the government spends on unemployment, the economy grows between $1.60 and $2, depending on the statistical source.

So, if the politicians don't extend the benefits, the economy grows slower and more people actually lose their jobs. And if cost-cutting offsets are required, the AP reports, hitting whatever part of the economy that spending is propping up, the economy grows slower.

So, if extending unemployment keeps people out of poverty and grows the economy, what's the issue?

The deficit? OK, let's talk deficit. Extending unemployment benefits for a year costs $65 billion. And causes the economy to grow at a greater pace, because poor people by the nature of being poor, spend what they're given.

So we trade off economic growth by adding to the deficit.

But, if we extend all the Bush tax cuts, $400 billion a year -- $4 trillion over 10 years -- hits the deficit. And I don't see politicians stepping up with cost-cutting plans to eliminate $400 billion.

And economists tell the AP that people who benefit most from tax cuts don't spend the money; they save it, because they can afford to. So continuing the tax cuts would run up the deficit and not prime the economic pump.

So, politicians oppose extending unemployment benefits, which are good for the unemployed and the economy, but favor extending the Bush tax cuts, which are good for those who don't need them and do little to aid the economy.

Can someone tell me how November's electoral changes have done anything to solve our real problems?

Fortunately, Lehigh Valley Congressman Charlie Dent has been on the side of extending benefits. Scott Garrett on the other side of the river opposes pretty much anything that would help working folks, so expect him to vote no. I'm hoping Leonard Lance in Hunterdon County is a yes. And I'll assume Rush Holt, being a Democrat who represents southern Hunterdon, will be a yes.

But on this issue, the culture of "no" has to stop. And trading off an unemployment vote for a Bush tax cut vote doesn't strike me as reasonable.

If you want only to fight the deficit, you vote no to each.  If you oppose the unemployment extension based on deficit impact, you'd have to oppose the tax cut extension for the same reason.

If you want to help the unemployed and keep the economy growing, you vote yes on the unemployment benefit extension. The benefit far outweighs the cost.

And once that is done -- hopefully in the next day before benefits lapse -- then you consider the Bush tax cuts, which expire at the end of the year.