POLITICAL ECONOMY
On unemployment, deficits, tip credit ...
How long can we continue to add to a growing budget deficit? Unemployment fell in June by 0.2 percentage points, but only because an estimated 800,000 Americans left the labor force entirely. Why would anyone get a job when they can receive more than a year in free income and numerous unnamed supplementary benefits?
Unemployment benefits are, of course, an entitlement. That's why we pay taxes. But for how long should they last? There's a fine line between assistance and enabling lethargy. According to J.P. Morgan Chase, we could reduce the unemployment rate by at least 1.5 percentage points by removing unemployment extensions. It's too easy to claim unemployment benefits, and at what point do we say that we've helped as much as we can? The time is now.
Nobody's denying that Americans are in need of assistance; everyone knows we're hurting, which is why the program was created in the first place and why there was bipartisan encouragement for its existence in years past. We do, however, need an incentive to work, and a push away from unemployment insurance for those who don't need it.
If we're going to keep extending this benefit, we then need to deduct from something else. Every year that someone uses unemployment benefits should delay a year of their Social Security benefits. Not only would this would limit the number of Americans who apply for unemployment, it also would alleviate pressure on a dissolving Social Security system. More debt won't stimulate the economy, and it's time for some alternative thinking.
NUBIA LUSTMAN, INVER GROVE HEIGHTS
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Republican concerns about the deficit and extending unemployment have rung hollow for me.
The shift, if it's real, has been dramatic since Karl Rove said that "deficits don't matter."