Unemployment benefits are not a deficit issue
You're probably tired of hearing me say that extending unemployment benefits -- and similar forms of temporary, targeted fiscal stimulus -- is neither here nor there so far as the deficit is concerned. But maybe you're not tired of hearing Diane Lim Rogers, an economist with the deficit-obsessed Concord Coalition, say it:
Hey, let’s get real: extended unemployment benefits are an effective form of stimulus spending, and although they do add to the short-term deficit, they are not part of the longer-term deficit problem. Nowhere in CBO’s report on the long-term budget outlook will you find different assumptions about unemployment benefits. It’s all about what we do with the Bush tax cuts and how well health reform will work. ...
Let’s face it: those who use their “worry” about our longer-term fiscal outlook as a reason to oppose extended unemployment benefits don’t want to reduce the deficit as much as they want to get rid of unemployment benefits.
She also quotes David Walker, president of the Peter G. Peterson Foundation, and Robert Bixby, president of the Concord Coalition, saying the same thing. Bixby, in particular, puts it well: “As a deficit hawk, I wouldn’t worry about extending unemployment benefits,’’ he said. “It is not going to add to the long-term structural deficit, and it does address a serious need. I just feel like unemployment benefits wandered onto the wrong street corner at the wrong time, and now they are getting mugged.’’
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