The Most Significant Investment The Government Is Making To Address Unemployment

It has been two days since the United States Department of Labor announced that if Emergency Unemployment Compensation and full federal funding for the Extended Benefit program are not extended, 400,000 Americans will lose unemployment benefits during the first weeks of March. The  jobless figure would then rise, if nothing is done by Congress, to three million people in May.
Sen. Jim Bunning of Kentucky dropped his effort to block legislation in the Senate to extend the benefits, and that is a headline in almost every newspaper today. President Obama will probably sign the new bill today. What is rarely said is that at least some members of Congress agreed with Bunning’s sentiment even if they do not share his approach to blocking the legislation. The deficit is too high on the public’s list of reasons to oust their representatives to Washington for any member of the House or Senate to ignore it. The decision to extend unemployment benefits for three million people will be expensive.

The emotions about jobless benefits are beyond any rational analysis. People who are out of work or know others who are out of work probably favor extending unemployment payments as a matter of self-preservation or compassion for friends. People with secure jobs are more likely to look at the deficit and its effects on future taxes and possibly Social Security, Medicare, and Medicaid as more important than the government supporting people who are out of work. Politicians and actuaries have told people over 40 have been told that the social safety net for the aged will always be intact. The financial conflagration of the last two years has caused the intelligent to believe otherwise. Social Security payments in perpetuity are not guaranteed by the divine.  Congress, in short, may have pushed the unemployment benefits issue as hard as it could have because the deficit problems make the legislation a double –edged sword.

The criticism of most government programs instituted in the last year to help the economy recover and to get people back to work and businesses back to the point where they are successful enough to hire people and pay taxes is that none of the money goes straight to the source of the problem. The federal government does not give businesses zero-interest-rate loans, which it could. The government does not give tax benefits to employers who bring on new workers, although that has been proposed. The most significant money that the government spends to help the unemployment problem is unemployment benefits. That is a perverse way to create incentives for hiring and, as hawkish economic conservatives would claim, is a reason to allow the unmotivated to do nothing while the taxpayers foot the bill.
The Congress and the White House have avoided the most radical solutions that FDR used during The Great Depression. For the most part, the government is not paying out-of-work Americans to work directly for the government. It would shake the foundations of a great republic if it were to add people to its payroll to sweep streets as the Communist Chinese do. Putting people to work on the government payroll would, however, solve a number of problems. That assumes that the government is efficient in managing its own employees.

Congress and the White House may once again explore the idea that government-paid workers could help repair American transportation infrastructure. The cost to repair roads, bridges, and tunnels across the country is well above a trillion dollars. Unfortunately, only a modest number of the presently unemployed have skills to work in any part of the construction industry. But, that still leaves all the work that needs to be done by churches, The Red Cross, and thousands of organizations whose primary goal is to help the needy. It is not the government’s business to meddle in religious beliefs by aiding non-profits which have a charter to help the needy. The government-employed workers can work for these organizations who care for those who have nothing. 
That the government should hire Americans to give them work which they cannot find on their own is against a number of principles that are a part of the national ethos. But, the nation’s future is terribly uncertain now. The old rules may not apply to a period when millions of Americans could be out of work for years at a time. The national unemployment problem has been described as intractable and fundamentally unsolvable. Those assumptions will be validated without radical action.

Douglas A. McIntyre