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Thread: Unemployment benefits extension clears hurdle

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    Re: Unemployment benefits extension clears hurdle

    Quote Originally Posted by Redress View Post
    I have looked into that claim and find exactly zero evidence to back it up.
    Really? Are you really sure that you found no evidence to back up that President Clinton altered the way the data is presented?

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    Re: Unemployment benefits extension clears hurdle

    Quote Originally Posted by Redress View Post
    The bolded stuff please.
    Alright.

    1) Unemployment benefits do not really help the economy. This point also really goes with, "Yes, but government generated demand is a false demand. It first has to kill a same level of private sector demand. There are no jobs (I would argue) because the government keeps spending untold amounts of money trying to "create" them, ignoring that it first elimintes them by taking that money out of the private sector."

    My point here is basically that an extension will really do nothing to help us move from where we are. This is basically an extension of the broken window fallacy (defined here).

    The point is that diverting money from one group to another does not really create "new" economic activity, it simply relocates what was already there to begin with, essentially destroying the economic activity that was there to start. This is an ecomonic theory certainly, as there are others that oppose this viewpoint, it appears we come down on opposite sides of that theory.

    2) Paying people not to work (in the name of economic recovery) is going to get us nowhere

    Many prominent economists have admitted that paying people not to work takes away their incentive to find work. Alan Krueger, the current Assistant Secretary of the Treasury for Economic Policy, and Lawrence Summers, current director of the White House's National Economic Council both have made comments to this regard. Even Paul Krugman states, "Do unemployment benefits reduce the incentive to seek work? Yes: workers receiving unemployment benefits are likely to be slightly more choosy about accepting new jobs." While he goes on to argue that "slightly" is key, he does admit that it makes them more choosy.

    Additionally, from the OECD Employment Outlook of 2007 (Page 75 roughly), it is argued, "It is well established that generous unemployment benefits can increase the duration of unemployment spells and the overall level of unemployment…"

    Additionally, A Federal Reserve Bank of San Francisco study argued basically that tax cut multipliers beat government spending multipliers in terms of GDP growth. That also goes to the point of unemployment benefits just won't work to bring us out of the where we are. (The first point)
    Last edited by NolaMan; 07-20-10 at 10:26 PM.

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    Re: Unemployment benefits extension clears hurdle

    Quote Originally Posted by Redress View Post
    They are taking those jobs. There just are not enough of them.
    another obvious failure of boy wonder and his retarded pet apes, the botox babboon and the Harry Rhesus Monkey



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    Re: Unemployment benefits extension clears hurdle

    Quote Originally Posted by The_Patriot View Post
    Really? Are you really sure that you found no evidence to back up that President Clinton altered the way the data is presented?
    They expanded on the data available. They included asking people if they are actively looking for work instead of guessing. They made the U1 - U7 scale somewhat standard. Did you read the whole thing?
    We became a great nation not because we are a nation of cynics. We became a great nation because we are a nation of believers - Lindsey Graham

    Quote Originally Posted by Fiddytree View Post
    Uh oh Megyn...your vagina witchcraft is about ready to be exposed.

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    Re: Unemployment benefits extension clears hurdle

    Quote Originally Posted by Redress View Post
    Dav, I have posted this link before: News - Economy - Unemployment Map - WOODTV.com and WOOD TV8: Grand Rapids, MI

    This is the traditional unemployment rate, by county for the area I live in. If you put your mouse over any county, it will show you the monthly rate for that county. This is the traditional, not "real" unemployment rate. AS things get worse(and they have been), not only are there fewer jobs available, but more people looking for them. When traditional unemployment is between 12 and 19 %, "real" unemployment is well over 20 %, or around 1/4 of the people in west Michigan are unemployed or underemployed. Now ask yourself how many jobs are probably available.

    There are jobs. Nursing is in demand. Of course, it means 2 + years of school to get. Engineers are in demand(we are moving away from our core employment in the automotive and furniture business around here, with suppliers for those industries looking to diversify), but again, 4 years of school. Minimum wage, part time jobs, not so much. Jobs that pay enough to cover the bills and don't require an education, very very rare, and far more applicants than jobs.
    A few things. For one thing, I'm not really sure what the point of that link was when my whole point was that high unemployment does not indicate a lack of jobs; saying that yes it does, because there's high unemployment, is a weird argument.

    Now, another link: Gallup Daily: U.S. Job Market

    Right now, there are more companies gaining jobs than losing them - according to Gallup, 29% of businesses are growing, whereas 21% are letting people go. Keep in mind that the 44% that are "not changing in size" are almost certainly hiring new people, as they replace people who both leave voluntarily and who retire, or who get laid off for non-economic reasons. Also look at data for the last two years - for the whole time the economy has been in the toilet, companies "not changing" in size have far outnumbered both "hiring" and "letting go", both of which have stayed more or less equal to each other.

    So yes, there are jobs available. I in fact know several people who have gotten at least halfway-decent jobs within the last year. Granted, the economy around here isn't nearly as bad as in Michigan, but the recession has had an effect nonetheless. Still, lots of people are hiring.

    Anyways, if someone really can't find a job in two years, I don't know how an extra six months is supposed to help/encourage them.
    Last edited by Dav; 07-20-10 at 10:41 PM.

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    Re: Unemployment benefits extension clears hurdle

    Quote Originally Posted by NolaMan View Post
    Alright.

    1) Unemployment benefits do not really help the economy. This point also really goes with, "Yes, but government generated demand is a false demand. It first has to kill a same level of private sector demand. There are no jobs (I would argue) because the government keeps spending untold amounts of money trying to "create" them, ignoring that it first elimintes them by taking that money out of the private sector."

    My point here is basically that an extension will really do nothing to help us move from where we are. This is basically an extension of the broken window fallacy (defined here).

    The point is that diverting money from one group to another does not really create "new" economic activity, it simply relocates what was already there to begin with, essentially destroying the economic activity that was there to start. This is an ecomonic theory certainly, as there are others that oppose this viewpoint, it appears we come down on opposite sides of that theory.
    That is not what is happening. We are borrowing money from other countries, not taking it from other people in this country. Eventually it will have to be handled, but economic growth will limit the impact in hopefully fairly short order. The Broken Window fallacy does not work because it is not a relatively closed community.



    2) Paying people not to work (in the name of economic recovery) is going to get us nowhere

    Many prominent economists have admitted that paying people not to work takes away their incentive to find work. Alan Krueger, the current Assistant Secretary of the Treasury for Economic Policy, and Lawrence Summers, current director of the White House's National Economic Council both have made comments to this regard. Even Paul Krugman states, "Do unemployment benefits reduce the incentive to seek work? Yes: workers receiving unemployment benefits are likely to be slightly more choosy about accepting new jobs." While he goes on to argue that "slightly" is key, he does admit that it makes them more choosy.

    Additionally, from the OECD Employment Outlook of 2007 (Page 75 roughly), it is argued, "It is well established that generous unemployment benefits can increase the duration of unemployment spells and the overall level of unemployment…"

    Additionally, A Federal Reserve Bank of San Francisco study argued basically that tax cut multipliers beat government spending multipliers in terms of GDP growth. That also goes to the point of unemployment benefits just won't work to bring us out of the where we are. (The first point)
    No one is saying that there is not a negative effect to unemployment, but I do not see any evidence that in fact it is anything but small. When official unemployment is running 10 %, and much higher in areas, and U6 closing in on 20 %, this shows a strong lack of available jobs.
    We became a great nation not because we are a nation of cynics. We became a great nation because we are a nation of believers - Lindsey Graham

    Quote Originally Posted by Fiddytree View Post
    Uh oh Megyn...your vagina witchcraft is about ready to be exposed.

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    Re: Unemployment benefits extension clears hurdle

    Quote Originally Posted by Dav View Post
    A few things. For one thing, I'm not really sure what the point of that link was when my whole point was that high unemployment does not indicate a lack of jobs; saying that yes it does, because there's high unemployment, is a weird argument.

    Now, another link: Gallup Daily: U.S. Job Market

    Right now, there are more companies gaining jobs than losing them - according to Gallup, 29% of businesses are growing, whereas 21% are letting people go. Keep in mind that the 44% that are "not changing in size" are almost certainly hiring new people, as they replace people who both leave voluntarily and who retire, or who get laid of for non-economic reasons. Also look at data for the last two years - for the whole time the economy has been in the toilet, companies "not changing" in size have far outnumbered both "hiring" and "letting go", both of which have stayed more or less equal to each other.

    So yes, there are jobs available. I in fact know several people who have gotten at least halfway-decent jobs within the last year. Granted, the economy around here isn't nearly as bad as in Michigan, but the recession has had an effect nonetheless. Still, lots of people are hiring.

    Anyways, if someone really can't find a job in two years, I don't know how an extra six months is supposed to help/encourage them.
    Dav, remember that just to keep up with increaded demand for jobs, the economy has to generate a certain number of positive jobs. 100k a month or so IIRC, which means that yes, there can be more people in the workforce, and still be higher unemployment(however you want to figure it)
    We became a great nation not because we are a nation of cynics. We became a great nation because we are a nation of believers - Lindsey Graham

    Quote Originally Posted by Fiddytree View Post
    Uh oh Megyn...your vagina witchcraft is about ready to be exposed.

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    Re: Unemployment benefits extension clears hurdle

    The differences between the Democrats and the Republicans could not be more stark: support for extending benefits to unemployed workers during the worst economic conditions since the 1930s versus support for extending hundreds of billions of dollars in tax breaks to the wealthiest among us. Yes, let's campaign on that.
    “Real environmentalists live in cities, and they visit what's left of the wilderness as gently and respectfully as possible.” — Donna Moulton, letter to the editor, Tucson Weekly, published on August 23, 2001

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    Re: Unemployment benefits extension clears hurdle

    It gives them a safety net. It buys them time, so they will still be alive and on the grid when things get turned around.

    Quote Originally Posted by Dav View Post

    Anyways, if someone really can't find a job in two years, I don't know how an extra six months is supposed to help/encourage them.

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    Re: Unemployment benefits extension clears hurdle

    Quote Originally Posted by NolaMan View Post
    Additionally, from the OECD Employment Outlook of 2007 (Page 75 roughly), it is argued, "It is well established that generous unemployment benefits can increase the duration of unemployment spells and the overall level of unemployment…"
    Obviously unemployment benefits can effect structural unemployment. The fact is we are 3-4% higher than the natural rate of unemployment. Unemployment benefits increase consumption, which in turn increases income. Therefore they are effective at reducing the output gap and returning us to full employment (ie the natural rate).

    Additionally, A Federal Reserve Bank of San Francisco study argued basically that tax cut multipliers beat government spending multipliers in terms of GDP growth. That also goes to the point of unemployment benefits just won't work to bring us out of the where we are. (The first point)
    This is mathematically impossible.

    A tax or transfer payment has a multiplier effect of

    MPC x 1/(1-MPC)

    whereas government spending will have a multiplier of:

    1/(1-MPC)

    Government spending does not go through a round of saving before it is initally spent (and therefore increase income).

    However, in another thread I stated that unemployment benefits are paid to people who have a higher MPC, which would mean that they have a larger multiplier effect than other similar policies (ie an across the board tax cut).
    Last edited by drz-400; 07-20-10 at 11:41 PM.

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