00,000 New Jobs

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How to Create 600,000 New Jobs Simple. According to House Minority Leader, Former Speaker of the House (and certified one-percenter) Nancy Pelosi, extending unemployment benefits would “make a difference of 600,000 jobs to our economy.” Oh where to start. Nobel Prize winner and alleged economist Paul Krugman wrote in his textbook "Macroeconomics" (in 2009): Public policy designed to help workers who lose their jobs can lead to structural unemployment as an unintended side effect. . . . In other countries, particularly in Europe, benefits are more generous and last longer. The drawback to this generosity is that it reduces a worker’s incentive to quickly find a new job. Generous unemployment benefits in some European countries are widely believed to be one of the main causes of “Eurosclerosis,” the persistent high unemployment that affects a number of European countries. In fairness, Ms. Pelosi has never been portrayed as an economics guru (unlike the far-left Krugman), but she does have quite a history of making grand pronouncements which simply defy logic. For example, Pelosi claimed that passing ObamaCare would result in the creation of four MILLION new jobs (including 400,000 immediately upon passage). We didn't know there were that many lobbyists on Earth, but we could be mistaken. According to CNSnews: Pelosi said President Barack Obama will not sign the Republican bill to extend the payroll tax cut and unemployment insurance benefits, which passed on Tuesday. That legislation is paid for by extending the standing pay freeze for federal workers for one more year, mandating that federal workers make larger contributions to their pensions, and raising the insurance rates for mortgages held by Fannie Mae and Freddie Mac. Millionaires would also be banned from collecting unemployment benefits and food stamps under the bill. Furthermore, Medicare Part B and D premiums would go up for those in the high-income bracket. On the other hand, Democrats who rejected the House legislation want the bill to be paid for by raising taxes on the rich, which they define as people making more than $1 million a year. The president will not sign the bill that the Republicans passed –"having issues that have nothing to do with the payroll tax, like the Keystone Pipeline and again [a] diminished, diminished proposal for the payroll tax cut and in the unemployment insurance,” Pelosi told reporters. “Under the Republican bill, 1 million Americans will lose there unemployment insurance in January; 2 million by February; and the difference between the president's bill and the Republican bill is 3 million people losing their unemployment insurance.” “After avoiding the issue and opposing a payroll tax cut, Republicans reluctantly passed through the House a bill that was doomed from the start,” said Pelosi. “It had the seeds of its own destruction there.” But back to Pelosi's laughable claim. Here's a terrific analysis on the actual numbers from Ed Morrissey: This is a fairly testable hypothesis. The last time Congress extended the jobless benefits was a year ago, in another crunch-time compromise between Republicans and Democrats on Pennsylvania Avenue. Since then, the economy has added about 1.5 million jobs — an average of 125,000 a month, which is only enough to keep up with population growth. Assuming that Pelosi’s correct and we subtract 600,000 from the 2011 numbers, the Obama adminstration’s economic policies would account for growth that falls well below that of population maintenance — at only 75,000 per month. The number and the claim is absurd. Whatever short-term economic benefit arises from giving benefits to the unemployed is not enough to generate enough marketplace demand to create 600,000 jobs, nor would its absence be enough to eliminate 600,000 jobs, either. Its absence would probably force the long-term unemployed into part-time and low-paying jobs to maintain themselves, which would not only service much of that same demand, it would also not take capital from the future — where its absence will cost jobs. There are social and humanitarian reasons for providing unemployment benefits, but job creation and economic growth are not among them. We wonder if anyone has asked Ms. Pelosi what the impact would be if we passed a bill allowing unemployment benefits for life? According to her logic, that should create 400 kabillion gazillion jobs, or just about the number required for the Obama economy to fully recover.