Does unemployment insurance (UI) incentivise unemployment?

[The Truth and Light]

If govt., pols, and bureaucrats are more effective at allocating economic resources -- then why do they require private sector wealth
seized at the point of a gun to fund their schemes?

What.

[Caninope]

Well, it actually does, to a small extent.

But it's not a bad thing. American unemployment insurance is not enough to overly incentivize unemployment so that it becomes a problem. In fact, certain types of unemployment can be considered "good". Frictional unemployment is unemployment that results from the mismatch of a person to a particular job; we don't want Physics PhD grads working in ice cream shops, and unemployment insurance helps incentivize their move from ice cream parlor to Physics classrooms.

Now, to the question of whether unemployment insurance incentivizes unemployment to such a large extent to be harmful on the economy? No.

shut up with your lies liberal.

Well, to be fair to Obamacult there is some evidence that might suggest that the unemployment rate is indeed higher, as a result of unemployment insurance. The most compelling argument in favor of that would be a comparison of European unemployment/insurance to American unemployment/insurance.

This results from, as I mentioned, an increase in frictional unemployment. It might also have its origin in an increase in the number of people who say they're looking for a job, but not actually looking for one (remember- one can only be unemployed if one is actively looking for a job, yet cannot find one).

However, the idea of an unemployed king is about as ludicrous as a welfare queen.

[Cannot think of a name]

It's a trap!

What?

I was merely qualifying Neo's statement. I'm not disagreeing with his general sentiment- people don't quit their jobs just to get all that beautiful unemployment money to pay for their new Cadillac, etc. At the same time, unemployment insurance does incentivize frictional unemployment (to a small extent) by making it easier for workers to transition from one job to another. There's nothing wrong with that, and it seems that frictional unemployment ends up benefiting the economy in the long run.

Granted, my case of the ice cream PhD grad was a little extreme. Frictional unemployment is where workers move from one job to another, based on a mismatch in skills, payment, work hours, location, taste, etc. It's essentially where a worker or an employer is dissatisfied with the other for one or more reasons.

No, sorry, I was afeared it was a little to round about. If you read through, Neo Art eventually says exactly what you said. And more or less what I said...and he did it while I was typing out my shit and then needled me for having repeated what he already said.

And now that I've typed out the whole convoluted thing...


You know what, fuck it, I'm going to go make breakfast. Screw you guys...

[The Black Forrest]

Why do you hate the free market fairies and the charity fairies?

A logical rebut to any progressive who believes that govt. can satisfy human needs and wants in an economically sustainable matter is debunked with the following challenge:

If govt., pols, and bureaucrats are more effective at allocating economic resources -- then why do they require private sector wealth
seized at the point of a gun to fund their schemes?

For example, why not just compete with free market firms on a level playing field without using coercion?

Simple question, no suitable answer from progressives, except that their politicians of choice have formed majority coalitions criminal enterprises with equally corrupt and self-serving cronies in the private sector (Wall Street, big oil, environmentalists, big unions, big pharma, etc.) to extort the fair gotten wealth of private citizens in private exchanges that have nothing to do with the crooks in Washington and the lobbyists that support them.

Moreover, they seal the deal by forming vast coercive and dysfunctional monopolies in education, health care, transportation, retirement, etc. in which competition from private sector firms is denied (for obvious reasons).

Ok? What ever that was supposed to address was posted via the Internet.

[Enadail]

If govt., pols, and bureaucrats are more effective at allocating economic resources -- then why do they require private sector wealth
seized at the point of a gun to fund their schemes?

What.

Taxes... he's talking about taxes. Which is apparently taken at gun point. Even though there is no gun.

[Cannot think of a name]

A logical rebut to any progressive who believes that govt. can satisfy human needs and wants in an economically sustainable matter is debunked with the following challenge:

If govt., pols, and bureaucrats are more effective at allocating economic resources -- then why do they require private sector wealth
seized at the point of a gun to fund their schemes?

For example, why not just compete with free market firms on a level playing field without using coercion?

Simple question, no suitable answer from progressives, except that their politicians of choice have formed majority coalitions criminal enterprises with equally corrupt and self-serving cronies in the private sector (Wall Street, big oil, environmentalists, big unions, big pharma, etc.) to extort the fair gotten wealth of private citizens in private exchanges that have nothing to do with the crooks in Washington and the lobbyists that support them.

Moreover, they seal the deal by forming vast coercive and dysfunctional monopolies in education, health care, transportation, retirement, etc. in which competition from private sector firms is denied (for obvious reasons).

I don't understand this at all. Am I supposed to? I'm asking this genuinely.

After suffering from a total source failure he's stuck in a rhetoric loop.



Am I doing programing humor right?

[Caninope]

Well, it actually does, to a small extent.

But it's not a bad thing. American unemployment insurance is not enough to overly incentivize unemployment so that it becomes a problem. In fact, certain types of unemployment can be considered "good". Frictional unemployment is unemployment that results from the mismatch of a person to a particular job; we don't want Physics PhD grads working in ice cream shops, and unemployment insurance helps incentivize their move from ice cream parlor to Physics classrooms.

Now, to the question of whether unemployment insurance incentivizes unemployment to such a large extent to be harmful on the economy? No.

Caninope, you're the best conservative ever.

Thank you.

Honestly, I like the unemployment insurance system as it mostly is now (although I'd love to shorten the length of benefits as the unemployment rate drops). However, that was my amateur economist hat on right there.

There is a correlation between unemployment insurance and unemployment, but we have to remember that unemployment is not bad, in and of itself, and more importantly, unemployment insurance was designed (and still remains) a system that doesn't fully replace income from a job- in other words, you still must find a job.

[The Truth and Light]

What.

Taxes... he's talking about taxes. Which is apparently taken at gun point. Even though there is no gun.

I always seem to notice that the upper class complains the most vocally about taxes, even though they don't pay them.

[Desperate Measures]

What.

Taxes... he's talking about taxes. Which is apparently taken at gun point. Even though there is no gun.

If you don't like the gov't and don't want to pay taxes to it, isn't the answer to leave? I mean... what exactly am I missing?

[Caninope]

What?

I was merely qualifying Neo's statement. I'm not disagreeing with his general sentiment- people don't quit their jobs just to get all that beautiful unemployment money to pay for their new Cadillac, etc. At the same time, unemployment insurance does incentivize frictional unemployment (to a small extent) by making it easier for workers to transition from one job to another. There's nothing wrong with that, and it seems that frictional unemployment ends up benefiting the economy in the long run.

Granted, my case of the ice cream PhD grad was a little extreme. Frictional unemployment is where workers move from one job to another, based on a mismatch in skills, payment, work hours, location, taste, etc. It's essentially where a worker or an employer is dissatisfied with the other for one or more reasons.

No, sorry, I was afeared it was a little to round about. If you read through, Neo Art eventually says exactly what you said. And more or less what I said...and he did it while I was typing out my shit and then needled me for having repeated what he already said.

And now that I've typed out the whole convoluted thing...


You know what, fuck it, I'm going to go make breakfast. Screw you guys...

Oh.

I'm an NSG'er. I'm much to lazy to read the thread.

[Grave_n_idle]

This results from, as I mentioned, an increase in frictional unemployment. It might also have its origin in an increase in the number of people who say they're looking for a job, but not actually looking for one (remember- one can only be unemployed if one is actively looking for a job, yet cannot find one).

And, as every time this debate comes up - I have to point out that unemployment insurance is temporary.

You have to be unemployed, actively looking for work... and even then, you can only claim it for so long.

This idea Obamacult perpetuates, that suggests that unemployment insurance exists as an alternative lifestyle, is a massive red herring.

So overall, no Unemployment Insurance doesn't incentivise unemployment - because it's not an alternative to employment.

[Desperate Measures]

I don't understand this at all. Am I supposed to? I'm asking this genuinely.

After suffering from a total source failure he's stuck in a rhetoric loop.



Am I doing programing humor right?

Of all the things which I'm weak at, and there are several hundred, economics is probably in the top 5. So, that's basically what I thought but I trust myself to understand these things about as far as I can spit a rat.

[Cannot think of a name]

Caninope, you're the best conservative ever.

Thank you.

Honestly, I like the unemployment insurance system as it mostly is now (although I'd love to shorten the length of benefits as the unemployment rate drops). However, that was my amateur economist hat on right there.

There is a correlation between unemployment insurance and unemployment, but we have to remember that unemployment is not bad, in and of itself, and more importantly, unemployment insurance was designed (and still remains) a system that doesn't fully replace income from a job- in other words, you still must find a job.

I feel like this is what it was like to find a coelacanth.

[Caninope]

So overall, no Unemployment Insurance doesn't incentivise unemployment - because it's not an alternative to employment.

I'd add a caveat. It incentivizes unemployment, but not long term unemployment or a withdrawal from the labor force for the individual receiving it.

As I have stressed, there is some correlation between unemployment and unemployment insurance. However, I've already posted two possible reasons for this correlation (and I'm sure you've read it) and made sure to point out that unemployment, in and of itself, is not bad for the economy.

[Obamacult]

No.

Well, it actually does, to a small extent.

But it's not a bad thing. American unemployment insurance is not enough to overly incentivize unemployment so that it becomes a problem. In fact, certain types of unemployment can be considered "good". Frictional unemployment is unemployment that results from the mismatch of a person to a particular job; we don't want Physics PhD grads working in ice cream shops, and unemployment insurance helps incentivize their move from ice cream parlor to Physics classrooms.

Now, to the question of whether unemployment insurance incentivizes unemployment to such a large extent to be harmful on the economy? No.

I disagree, UI prevents the transfer of the most important resource in economics (people) from economically unsustainable jobs to sustainable and productive jobs.

Like every thing else govt. does, it creates unintended consequences and situations that simply kick the can down the road to the next recession or cyclical downturn. The only difference between a self-correcting free market recession is that a govt. recession keeps in place the structural deficiencies that led to the original recession OR it forestalls and postpones the reallocation of resources with politically motivated legislation, credits, subsidies and bailouts.

Case in point, the ridiculous $8k tax credit to purchase a home at the height of the recession simply postponed the inevitable recovery that we are experiencing now ( I now, I took advantage of this boondoggle, thanks!. Had govt. not intervened irrationally and rashly, the housing reallocation and recovery would be further ahead today

Similarly, the auto market would be further ahead without the ridiculous politically inspired boondoggle of the junker for cash scheme.

I found this nonsense from the Duke of Progressive bullshit Paul Krugman recently that fully illustrates the folly of govt. trying to swim upstream from the torrent of economic realities:

To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble.--Krugman, 2002

For an example of what happens during severe recessions when govt. doesn't intervene with counter-productive politically motivated programs, read this:

http://www.wallstformainst.com/2011/11/ ... -heard-of/

If you have more time, watch this:

http://www.businessinsider.com/the-1920 ... ng-2009-10

Indeed, the reason why the Great Depression was so long and severe was precisely because of govt. interference in the normal and beneficial market corrections that were required to get the economy back on course (without deficit spending).

[Caninope]

Thank you.

Honestly, I like the unemployment insurance system as it mostly is now (although I'd love to shorten the length of benefits as the unemployment rate drops). However, that was my amateur economist hat on right there.

There is a correlation between unemployment insurance and unemployment, but we have to remember that unemployment is not bad, in and of itself, and more importantly, unemployment insurance was designed (and still remains) a system that doesn't fully replace income from a job- in other words, you still must find a job.

I feel like this is what it was like to find a coelacanth.

There are reasons to criticize unemployment insurance. In fact, I would argue against a permanent move to European style benefits because of the incentives to remain unemployed.

But I'm talking about the US, not Europe.

[Obamacult]

So overall, no Unemployment Insurance doesn't incentivise unemployment - because it's not an alternative to employment.

I'd add a caveat. It incentivizes unemployment, but not long term unemployment or a withdrawal from the labor force for the individual receiving it.

As I have stressed, there is some correlation between unemployment and unemployment insurance. However, I've already posted two possible reasons for this correlation (and I'm sure you've read it) and made sure to point out that unemployment, in and of itself, is not bad for the economy.

You have to add political reality (or irrationality) to the equation.

For example, UI has increased in duration to almost two years under the progressives and RINOs -- hence, govt. has incentivised long term record levels of structural unemployment. For example, we now have a large number of Americans who may be not be profitably employed and will remain on the public dole for some time to the detriment of themselves and society at large.

Hence, progressive policies create destructive incentives that undermine merit, encourage political corruption via lobbying and patronage, and reward sloth.

And they wonder why there are demonstrable and real differences between a nominally capitalist economies and socialist economies -- see N. Korea, S. Korea - W. Germany, E. Germany, -- China, Taiwan......

[Caninope]

I disagree, UI prevents the transfer of the most important resource in economics (people) from economically unsustainable jobs to sustainable and productive jobs.

How so?

Like every thing else govt. does, it creates unintended consequences and situations that simply kick the can down the road to the next recession or cyclical downturn. The only difference between a self-correcting free market recession is that a govt. recession keeps in place the structural deficiencies that led to the original recession OR it forestalls and postpones the reallocation of resources with politically motivated legislation, credits, subsidies and bailouts.

What's a government recession? Anyways, I take it that you reject the Keynesian idea of a "paradox of thrift"?

Case in point, the ridiculous $8k tax credit to purchase a home at the height of the recession simply postponed the inevitable recovery that we are experiencing now ( I now, I took advantage of this boondoggle, thanks!. Had govt. not intervened irrationally and rashly, the housing reallocation and recovery would be further ahead today

Irrationally and rashly? The government was able to postpone the housing credit and attempted to increase aggregate demand. The government wasn't attempting to inflate the bubble- it was attempting to moderate the whole economic cycle.

Similarly, the auto market would be further ahead without the ridiculous politically inspired boondoggle of the junker for cash scheme.

I found this nonsense from the Duke of Progressive bullshit Paul Krugman recently that fully illustrates the folly of govt. trying to swim upstream from the torrent of economic realities:

To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble.--Krugman, 2002

A quote that's been taken out of context by someone who seems to not be familiar with the actual content matter. Krugman was actually saying that the Federal Reserve should be attempting to increase aggregate demand (as the Federal Reserve has done in the past). A student of economics would also know that the Federal Reserve has intervened in the past to decrease aggregate demand whenever necessary.

Indeed, the reason why the Great Depression was so long and severe was precisely because of govt. interference in the normal and beneficial market corrections that were required to get the economy back on course (without deficit spending).

Or it could have something to do with an utterly inept monetary policy.

[Caninope]

For example, UI has increased in duration to almost two years under the progressives and RINOs -- hence, govt. has incentivised long term record levels of structural unemployment.

Since you're the one who loves to talk about political realities, let's talk about them.

Unemployment insurance is going to decrease whenever the Fed stops its quantitative easing.

[Greed and Death]

I disagree, UI prevents the transfer of the most important resource in economics (people) from economically unsustainable jobs to sustainable and productive jobs.

How so?

Like every thing else govt. does, it creates unintended consequences and situations that simply kick the can down the road to the next recession or cyclical downturn. The only difference between a self-correcting free market recession is that a govt. recession keeps in place the structural deficiencies that led to the original recession OR it forestalls and postpones the reallocation of resources with politically motivated legislation, credits, subsidies and bailouts.

What's a government recession? Anyways, I take it that you reject the Keynesian idea of a "paradox of thrift"?

Case in point, the ridiculous $8k tax credit to purchase a home at the height of the recession simply postponed the inevitable recovery that we are experiencing now ( I now, I took advantage of this boondoggle, thanks!. Had govt. not intervened irrationally and rashly, the housing reallocation and recovery would be further ahead today

Irrationally and rashly? The government was able to postpone the housing credit and attempted to increase aggregate demand. The government wasn't attempting to inflate the bubble- it was attempting to moderate the whole economic cycle.

Similarly, the auto market would be further ahead without the ridiculous politically inspired boondoggle of the junker for cash scheme.

I found this nonsense from the Duke of Progressive bullshit Paul Krugman recently that fully illustrates the folly of govt. trying to swim upstream from the torrent of economic realities:

To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble.--Krugman, 2002

A quote that's been taken out of context by someone who seems to not be familiar with the actual content matter. Krugman was actually saying that the Federal Reserve should be attempting to increase aggregate demand (as the Federal Reserve has done in the past). A student of economics would also know that the Federal Reserve has intervened in the past to decrease aggregate demand whenever necessary.

Indeed, the reason why the Great Depression was so long and severe was precisely because of govt. interference in the normal and beneficial market corrections that were required to get the economy back on course (without deficit spending).

Or it could have something to do with an utterly inept monetary policy.

don't forget the protectionist trade policies.

[Caninope]

don't forget the protectionist trade policies.

And the protectionist trade policies.

I honestly doubt that deficit spending had a negative effect on the GDP. For the record, I dislike fiscal stimuli in most cases (I'm a bigger fan of monetary stimuli).

[Neo Art]

I mean, fundamentally, this is a discussion of two sides. I'm going to simplify things into "my side" and "obamacult's side" (which is of course untrue, he doesn't really have a side, he almost certainly doesn't believe any of this, and has no further interest in discussing this issue, and is, and has remained, nothing more than a troll of this forum, as evidenced by him already losing a nation for trolling in a very short period of time, and the fact that he's allowed to continue with such a flagrant agenda is really a fundamental failure in this site as of late, and is further reason for its further decline into the drain, but I digress, assuming, I'm sure quite incorrectly, that he believe a word of what he's saying. He doesn't, because he's trolling, but whatever).

We both, in the end, see an attempt at economic stability. My argument is, and always has been, that an unemployment insurance system is a necessary bargaining chip for the worker to prevent downward pressure on wages and positions. If I know I can hold out, I, and everyone else in my skill bracket, can put pressure on the employer. No, we're not going to take a job as a doctor for 10 dollars an hour while we sit 150 grand in debt. We will not allow you to profit from our misfortune. We will hold out, we can afford it. Thats what I think SHOULD happen.

The other "side" of things sees the opposite effect of what's going on. That if a job is offered at $10 an hour, that's what the pay SHOULD BE, regardless of what it is. That the "job creators" are bound by the flow of the free market, and if a job is paying 10 dollars an hour, then that's what the job should pay, regardless of what you think it should pay or what it paid in the past. That employer are merely agents of hte market, and allowing ANY ability for hte worker to reject that $10 an hour is harmful to the free market, not helpful. That wages will set optimally, because that's what the free market will do, if we let it. Unemployment, however, by allowing a disproportionate influence to the worker, can allow them to disrupt free market equilibrium by letting the government prop up their non efficient demands.

That's their argument.

Now, of course, they see unemployment as creating an inequality towards the worker, I see it as equalizing and existing inequality tilted towards the business owner. Which one should any sane, rational, intelligent person believe?

Believe the one that admits that while the workers have an incentive to earn as much as possible, also accepts that the owner has the same incentive. And while the worker earns through high wages, the owner earns through low wages, and thus increased profit.

Believe the one that admits that owners have every insentive to keep wages artificially low, and that accepts that the premise that wages will be set at market equilibrium, even in periods of high unemployment, when owners have every insentive to force them to below fair market conditions, is fucking stupid.

Believe the one that accepts that owners are people too, not mindless robots of "the free market" and will use every possible advantage they can to benefit themselves, and to presume that the deal being offered is market optimal, when they have every reason to ensure it favors them as much as possible, is fucking stupid.

Believe the one that accepts that the rich already have influence and power, and to try and to limit a system designed to place some bargaining power back into the hands of hte non rich, because it is "unfair" is, again, fucking stupid.

In short, if you have trouble deciding who to believe, me or him, believe the one whose understanidng of ecnomics is better than that of a child.

And that ain't him.

[Obamacult]

IN closing to the peanut gallery:

The temporarily unemployed will do just fine if forced to function under merit within a free, voluntary and peaceful society in which govt. only role is to protect life, liberty, private property and enforce legal contracts impartially.

However, when you enlist the coercive, monopolistic and unaccountable govt. to serve as pay police, nanny, morality police, doctor, teacher, etc. -- it's beneficial role as the protector of life, liberty, private property, and impartial arbiter of legal contracts will be irreparably corrupted and distracted by the trillions of dollars in tax and regulatory powers it gains.

And no! you can't pass legislation to outlaw campaign contributions bribes anymore than you outlaw illicit drug use when a demand exists and trillions can be made (legally or illegally) supplying that demand -- in either case drugs or preferential tax and regulatory policy.

In sum, the free market isn't perfect -- but part of its strength is that it is dynamic and always competitive -- hence resources can move from heretofore unproductive and passe uses to emerging resources that heretofore were lacking.

IN contrast, govt. prevents the efficient and beneficial reallocation of societal resources by trying to save obsolete jobs and industries in a quid pro quo from these dinosaurs for bribe money and special interest votes.

You don't agree with me now because your ideological views are obviously hardwired in place --and certainly these views will be further solidified by an temporary recovery that is at hand -- but it is hoped that when interest rates rise, govt. debt payments, and unsustainable entitlements rear their ugly heads with far more force in the next recession/depression, you will have heard the warnings beforehand.

Maybe then we will all be libertarians.

[Grave_n_idle]

For example, UI has increased in duration to almost two years under the progressives and RINOs -- hence, govt. has incentivised long term record levels of structural unemployment.

No, UI increased because of long-term unemployment - it followed it - it didn't create it or incentivise it.

People who were (and still are) in areas where there was no work have been able to make ends meet for a little longer because of an extension to UI. It didn't cause the prolonged employment drought, or stop the jobs from arriving.

You're putting the cart before the horse.

[Caninope]

In sum, the free market isn't perfect -- but part of its strength is that it is dynamic and always competitive -- hence resources can move from heretofore unproductive and passe uses to emerging resources that heretofore were lacking.

Unemployment insurance actually helps create a competitive labor market by lowering the transaction costs of moving from one job to another.