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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.’’

By Ezra Klein  |  July 7, 2010; 10:40 AM ET
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It's all about what we do with the Bush tax cuts?

She means the tax breaks for the rich that balanced our budget, grew the economy, created financial innovation, boosted the stock market, prevented financial catastrophe, unfettered the investing class, and found the weapons of mass destruction in Iraq? Those Bush tax cuts?

Yeah, I definitely want to retire at 75 so that we can keep those.

Posted by: HeavyJ | July 7, 2010 10:50 AM | Report abuse

There's nothing preventing Democrats from redirecting unspent stimulus money for projects that haven't started yet to extending unemployment benefits.

The difference is that the Democrats believe that those other projects are worth preserving even if it means adding more to the federal budget deficit this year. The Republicans believe not adding to the deficit is more important than those other projects.

Posted by: jnc4p | July 7, 2010 11:18 AM | Report abuse

--"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."--

Can't one criticize unemployment benefits on both accounts? Even without their contributions to the deficit, large or small as that may be, it is still wrong to steal from one group of people to give to another. There is a basic principle in there that most people learn about age four.

Posted by: msoja | July 7, 2010 11:18 AM | Report abuse

Well look what the liberals have come to. Two seperate entries on this uber liberal blog extolling the virtues of unemployment compensation.

Now why is that? It couldn't possibly be because under the direction of our arch liberal Mr Obama, there aren't any jobs now could it?

No doubt Mr Klein and his teeming hoarde of sycophants would much prefer to talk about the jobs that their policies are creating.

But, sigh, they can't, because, well, they haven't created too many jobs.

Tell ya what, why don't you get back to us when the stuff you've touted actually produces results? I hear that the devil was looking at ankle length fur coats just recently so I'm expecting to hear from you really soon.

Posted by: skipsailing28 | July 7, 2010 12:09 PM | Report abuse

Wow. Not a lot of fans of the unemployed on this thread.

@jcnp: Understood. I think that Rodger's point, and by extensions Ezra's, is that deficit funded unemployment doesn't change the character of the long-term debt. If the deficit/GDP ratio was going to hit 25% in 2035, it will still hit it in . . . 2035. The money's not large enough to materially affect the course of the debt, so I think it's fair to judge it on humanitarian grounds.

@msoja - Well, I can see your point, but on those grounds, any government policy is restributive. Farm subsidies 'steal' from non-farmers. Highway construction 'steals' from people who drive less. The military 'steals' from people who don't approve of current strategy. If you judge every form of government policy purely as a form of theft, than government doesn't operate at all - and that's not conservative. It's anarchy.

Posted by: strawman | July 7, 2010 12:29 PM | Report abuse

Why, yes, in fact, elimination of the unemployment entitlement is a goal which many wish to achieve. And?

Posted by: rmgregory | July 7, 2010 1:02 PM | Report abuse

At age 64, I am one of those permanently unemployed, laid off two years ago. I made $19 an hour. I now collect in unemployment the equivalent $6.55 an hour, a two-thirds reduction. When that runs out, it will be 100%. Multiply that by millions and it's not hard to see why the economy is in the dumps.

By the way, my reply to Sharon Angle of Nevada: I'd much rather have my $19/hour job back than collect the $6.55. Trouble is, it was in a dying industry, the newspaper business.

Posted by: tomcammarata | July 7, 2010 3:10 PM | Report abuse

I love how the deficit hawks on board want to excoriate the comparative pittance for the unemployed, yet have nothing to say about the money poured down the military-industrial complex hole, or the corporate welfare afforded the oil industry. Where are the cries against redistributing money upward? These guys have been kicked by the Bush Administration and big business, so now they want to kick the dog(unemployed) because they are too afraid to go against Rush Limbaugh and his ilk.

Posted by: wd1214 | July 7, 2010 3:19 PM | Report abuse

I said something very similar on my blog only highlighting Rep. Shimkus' voting record to make my point,

Posted by: Chris-TheFold | July 7, 2010 4:01 PM | Report abuse

No, Ezra, I don't get tired of hearing you or anyone else keep saying it. Unless it gets said over and over congress will not extended benefits. Good people will lose their homes and local businesses will be hurt because no one will have any money to spend.
btw, if you're looking for work there's great job search advice on the internet radio show at

Posted by: kcsam215 | July 7, 2010 4:50 PM | Report abuse

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Posted by: luiscade05 | July 11, 2010 1:50 AM | Report abuse

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