I Don’t Know If This Is Ignorance Of Economics Or Ignorance Of Human Nature

Real Clear Politics reported yesterday that President Obama’s Press Secretary, Jay Carney, stated in answer to a question asked by a Wall Street Journal reporter on how extending unemployment benefits creates jobs,  “It is one of the most direct ways to infuse money directly into the economy because people who are unemployed and obviously aren’t running a paycheck are going to spend the money that they get. They’re not going to save it, they’re going to spend it. And with unemployment insurance, that way, the money goes directly back into the economy, dollar for dollar virtually.”  Jay Carney further stated, “Every place that, that money is spent has added business and that creates growth and income for businesses that leads them to decisions about jobs, more hiring. So, there are few other ways that can directly put money into the economy than applying unemployment insurance.”

President Obama is pushing for further extension of unemployment benefits currently maxing out at 99 weeks–that’s almost two years. 

The article further reports:

“Carney estimates that unemployment benefits could create up to one million jobs. However, then he talks about how a possible natural disaster could hurt US economy as well as the global economy.”

I don’t even know where to start.  I might mention an article at rightwinggranny from May of last year.

I reported:

“Michigan has the nation’s highest unemployment rate, and some of its residents are rejecting job offers in order to continue collecting unemployment.  The landscaping industry is finding that some workers are choosing to stay home and collect unemployment rather than working (and paying the expenses involved in working–travel, gas, meals, etc.). ”

I doubt that extending unemployment for more than two years creates jobs–between human nature and the fact that people on unemployment spend their money on necessities–they generally don’t have the extra money to stimulate the economy.  We don’t need to extend unemployment, we need to get the government off the back of the private sector so that businesses can create jobs.  The idea that the Obama Administration believes that extending unemployment creates jobs is simply amazing.  They don’t understand economics and they don’t understand human nature.