After receiving overwhelming support, Congress is set to send HR 3548, the Unemployment Compensation Extension Act of 2009, to President Barack Obama for his signature.
Among other things, the bill would extend unemployment insurance benefits in all states an additional 14 weeks. For states with unemployment rates at or above 8.5 percent, an additional six weeks of benefits would be granted.
With the passage of this bill, this marks the fourth time since June 2008 that Congress has voted to extend benefits, meaning that certain jobless Americans could be eligible for up to 99 weeks worth of benefits. This breaks the previous record of 65 weeks set back during the 1970’s.
While we can all sympathize with people who have legitimately lost their jobs through no fault of their own, Congress’ passage of HR 3548 threatens to do more harm than good. There’s a real danger that extending unemployment benefits – seemingly indefinitely – will further incentivize unproductive behavior and prolong economic stagnation.
Remember, economists have proven that when you subsidize an activity, you tend to get more of it – as is the opposite with taxation.
Nobody can fault Congress or the administration for wanting to help the unemployed; however, there is a right way and a wrong way. And more government involvement, more government spending, and more government subsidies are just not the right way.
– James Quintero