Economics and Government

Back in June 2010 Nancy Pelosi made a statement that unemployment benefits are the fastest way to create jobs. This statement was made in support of extending the amount of time someone can receive unemployment benefits. The unemployment benefits were extended and now in December we have an even higher unemployment rate then we did back in June and now the extended benefits are expiring again. So what did the extended unemployment benefits do? From what I can see, it didn’t do much. Pelosi statement illustrates the problem with government trying to create jobs. They are completely clueless, they have no idea how the economy actually works. Unemployment benefits like most handouts that the government gives only serve to hinder the economy. Where does all this money come from? Taxes, and as we have seen in class is that taxes that are not trying to fix a negative externality or fix market failure cause market inefficiency. For some reason politicians cannot figure out that the best way to create jobs is to reduce taxes. What is needed is smarter taxes, taxes that create the least amount of excess burden.

Website: http://www.foxnews.com/politics/2010/07/01/pelosi-unemployment-checks-best-way-create-jobs/