We Just Don't Understand Jobless Benefits

Paul Krugman sets out to clear up the confusion
By Kate Seamons,  Newser Staff
Posted Jul 5, 2010 8:30 AM CDT
We Just Don't Understand Jobless Benefits
In this photo taken June 28, 2010, job seekers wait in line to register and attend a National Career Fair in San Francisco.    (AP Photo/Eric Risberg)

(Newser) – Congress went home to its fireworks and watermelon without extending jobless benefits, leaving Paul Krugman to explain how that's possible. "We’re facing a coalition of the heartless, the clueless, and the confused," he writes, and though we're probably stuck with the first two groups, he thinks it's high-time the third gets set straight. Krugman wants to believe some lawmakers are good-hearted but just misinformed, thinking, like Sen. Jon Kyl, that “continuing to pay people unemployment compensation is a disincentive for them to seek new work.”

The thing is, when times are good, "generous unemployment benefits may keep employment lower than it would have been otherwise." But times aren't good, and with five unemployed workers for every available job, "cutting off benefits to the unemployed will make them even more desperate" for jobs that don't exist. And that's not all. "One main reason there aren’t enough jobs right now is weak consumer demand. Helping the unemployed, by putting money in the pockets of people who badly need it, helps support consumer spending," he writes for the New York Times. Sure, it'll "slightly" worsen the budget deficit, but "penny-pinching at the expense of the unemployed is cruel as well as misguided." (Read more unemployment benefits stories.)

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