Yeah, and emergency rooms just encourage drunk driving

Some argue that unemployment insurance 'encourages' the jobless not to look for work. By that logic, ERs and seat belts encourage drunk driving.

By , Guest blogger

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    Traffic flows over the Golden Gate Bridge as a boat passes below in this view from Sausalito, Calif., on Nov. 24. On heavy travel weekends, like Thanksgiving and July, California Highway Patrol puts more officers on the road to enforce seat belt, sobriety and other safety laws. These safety precautions don't attract claims of 'encouraging reckless driving,' so why does extending unemployment insurance draw charges that it keeps the jobless out of work?
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I do not understand why so many pro-market commenters are opposed to extending unemployment relief. The supposedly killer, knockdown, unanswerable argument is that unemployment relief encourages unemployment. Hospital emergency rooms encourage drunk driving. Should we therefore close hospital emergency rooms? Those of us in the Austrian school of economics keep saying, and rightly I believe, that the economy is slow to recover mostly because of “regime uncertainty.” All that activist government policy to stimulate here and bailout there is creates uncertainty for business investors. Better to curry favor in Congress where they make the ever-changing rules than to try to figure out what consumers might actually prefer and what the underlying scarcities might actually be. This, we say, makes for a sluggish economy and a bad job market as we get bailouts instead of investment, politics instead of economic adjustment. If we really believe all that, then we should also believe that most of the unemployment out there is not the fault of the unemployed.

Sure, there is some gaming of unemployment relief, but it is difficult to be without work even apart from the loss of income. And federal unemployment benefits average only $300 per week. Most of the nearly 10% of the work force enduring unemployed would be only too happy for a job offer.

With the current unemployment rate, federal unemployment benefits cost between 75 and 80 billion dollars per year. At about 2% of the federal government budget, that’s not chump change. But at least this budget item produces a direct benefit to unemployed Americans most of whose jobs were lost because of bad policy by the same federal government now acting to mitigate the harm it has produced.

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Let’s get the government’s economic policy in shape before attacking the one corrective measure that reliably helps the ordinary Americans most harmed by the current policy regime.

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