The Fallacy of Unemployment Insurance Benefits

President Obama and prominent democrats are once again pushing an increase to unemployment benefits. They even label them as “emergency” payments while at the same time telling us that the economy is rebounding and growing stronger. One of the left’s claims to sell the program extension, a clear fallacy of unemployment insurance benefits, is that it would create jobs.

Saying that paying unemployment benefits creates jobs is like saying digging a hole creates dirt!dirt_pile

Money that goes out to one person in unemployment payments first gets taken from another as a tax. The tax creates a hole in their bank account just as digging creates a hole in the ground. Leftist economic illiteracy claims that the payments create jobs as each person spends their unemployment checks, bringing revenue to businesses such as heating companies and grocery stores.

What’s missed, either through ignorance or deception, is that the person who got taxed no longer has their own money to spend on heat or groceries, negating every unemployment check dollar. In reality, it’s far more likely that the extension of benefits costs the economy jobs due to government inefficiency, but it most certainly doesn’t create any.