Why Unemployment Payments Destroy the Economy


Michelle Malkin writes about Speaker of the House Nancy Pelosi’s latest: “Unemployment benefits are creating jobs faster than practically any other program”

Not only is unemployment obviously bad because it pays people not to work, it gives them a disincentive to work or create jobs.

I have a plumber friend who, with his brother, is trying to rapidly expand their growing business. They need plumbers to work for them. They know a lot of plumbers who are capable and otherwise hard-working. However, they cannot offer a salary that is much more than the unemployment checks their are collecting. Unemployment checks, and the particularly lax way in which they are freely distributed regardless of whether the recipient meets any of the requirements, is destroying jobs.

Reality is a motivating factor to get people to work. Without food on the table, clothes on your back, or a roof over your head, you will quickly discover why people work as hard as they do. It is typically those who have lived through a period of actual poverty that work the hardest, trying to lay in store sufficient resources so that any bad spell won’t be met with any shortages of food or other necessities.

Having unemployment is a de-motivating factor to not only acquire what you need today, but to lay up in store for tomorrow. After all, if I am going to continue to get paid even if I lose my job, why do I really need 6 months or a whole year’s salary in the bank to lay me over between jobs?

Then there are those who understand that they have a unique ability to not only provide for themselves, but help others provide for themselves. These build companies and create jobs that otherwise wouldn’t exist. When we tax these productive and producing members of society, they are not able to hire as many people as they otherwise would.

If Nancy Pelosi wants to find the most efficient expenditure in the federal budget, that would be all the money neither collected in taxes nor spent. This money remains in the hands of the private sector, who, unlike government, can actually multiply and increase its value. These members of the private sector use untaxed and unspent money to build jobs and corporations, and create a future for people who wouldn’t otherwise have any. If anything, we should be increasing the amount of money in the private sector by dramatically cutting the federal budget, especially the social programs like unemployment, and dramatically cutting federal taxes across the board without condition.


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