Unemployment Insurance is an Economic Stimulus? [Archive]

Michael

Jul 14th 2010, 09:59 PM

I feel like I'm living in bizarro world sometimes. Nancy Pelosi says unemployment insurance is one of the biggest stimuli to boost the economy. I would like to hear someone here explain this to me. Help me. I'm confused...well, somebody is confused.

http://www.youtube.com/watch?v=_5t7Cl6W-Ag

I certainly would never advance the argument in those terms. Unemployment insurance isn't stimulus at all. That is nonsense.

That being said, when the economy is in recession, one of the best ways to reduce the shock on the personal lives of average people, and to reduce the overall severity of the recession and the risk of turning into a depression, is to pay out UI on reasonably generous terms - for extended durations.

That's a rather complicated to explain to average voters in a two minute sound-bite. I have a bit of sympathy for Pelosi here. She's a very shrewd and successful politician. If she has to 'frame' UI extensions in terms of 'stimulus' to get public support, then so be it. Can't blame Pelosi because the public is foolish and/or uninterested in public policy - or if the media is going to play dumb.

Ultimately I don't care what spin the politicians put on it, I care what the content of the policy is. That's what really matters. In this case, Pelosi is pushing good public policy (in my not so humble opinion).

For example, from my 'realist' perspective, the real horror of the Bush Administration lies about Iraq were not that they were lies, but that they were used to enact and justify really bad public policy. In this case, Pelosi is pushing a pretty good public policy, therefore I don't care if she calls it 'economic stimulus' or not - that doesn't really matter.