Nancy Pelosi has said that unemployment benefits stimulate the economy and create jobs.
Is this true? Does it create more jobs for government to pay for your food, or for you to pay for your food? It makes more sense that an employed person would benefit the country more than an unemployed person.
If you actually think about it for a minute, Pelosi's comments do not make sense unless you live in Opposite World.
A Hypothetical Example Let's make up a hypothetical example to illustrate what Pelosi is talking about.
In our example, the United States is a very small town.
There is a farmer in the town, and some townspeople.
One man is out of work.
Since this town has unemployment insurance, the government takes a little bit of money from everybody in this town to pay the unemployed man.
He takes some of his money and gives it to the farmer for food, and gives a little to the bank to pay his mortgage.
In this example, nothing has been created.
The only thing that has happened was that a little money was exchanged; we are left with the same amount of goods that we had before.
The people that the government took the money from to pay for the unemployed man's mortgage and food would have spent or saved the money if they had been allowed to keep their money.
Let's say that instead of collecting unemployment, this man decides to become an entrepreneur.
He collects some sticks in his backyard and starts creating baskets.
He then sells the baskets to his neighbors, and takes the money that he earns and gives some to the farmer for food, and some to the bank to pay his mortgage.
Since he earns more money making baskets than he does on unemployment, he has a little bit left over to buy some clothes and invest in his basket making business.
In which of these scenarios is the town better off? In the first scenario where the man remains unemployed and takes money from people without offering anything in return, or in the second scenario where the man still gets money, but they get baskets in return? My belief is that the town with the baskets is better off.
Back to the Real World I'm not saying that the unemployed need to take up basket making, although there may be some in the ranks of the unemployed who are great basket makers and might want to consider opening up an Etsy shop or selling on eBay.
The main point is that the unemployed are better off employed and doing something than they are collecting money from everybody else.
Whether they are employed making widgets or providing a service doesn't matter; what does matter is that there is more production when people are working.
Unemployment is not a "job creator".
It is meant to be a temporary measure to help a worker out until they can get back to contributing to the economy again.
Is this true? Does it create more jobs for government to pay for your food, or for you to pay for your food? It makes more sense that an employed person would benefit the country more than an unemployed person.
If you actually think about it for a minute, Pelosi's comments do not make sense unless you live in Opposite World.
A Hypothetical Example Let's make up a hypothetical example to illustrate what Pelosi is talking about.
In our example, the United States is a very small town.
There is a farmer in the town, and some townspeople.
One man is out of work.
Since this town has unemployment insurance, the government takes a little bit of money from everybody in this town to pay the unemployed man.
He takes some of his money and gives it to the farmer for food, and gives a little to the bank to pay his mortgage.
In this example, nothing has been created.
The only thing that has happened was that a little money was exchanged; we are left with the same amount of goods that we had before.
The people that the government took the money from to pay for the unemployed man's mortgage and food would have spent or saved the money if they had been allowed to keep their money.
Let's say that instead of collecting unemployment, this man decides to become an entrepreneur.
He collects some sticks in his backyard and starts creating baskets.
He then sells the baskets to his neighbors, and takes the money that he earns and gives some to the farmer for food, and some to the bank to pay his mortgage.
Since he earns more money making baskets than he does on unemployment, he has a little bit left over to buy some clothes and invest in his basket making business.
In which of these scenarios is the town better off? In the first scenario where the man remains unemployed and takes money from people without offering anything in return, or in the second scenario where the man still gets money, but they get baskets in return? My belief is that the town with the baskets is better off.
Back to the Real World I'm not saying that the unemployed need to take up basket making, although there may be some in the ranks of the unemployed who are great basket makers and might want to consider opening up an Etsy shop or selling on eBay.
The main point is that the unemployed are better off employed and doing something than they are collecting money from everybody else.
Whether they are employed making widgets or providing a service doesn't matter; what does matter is that there is more production when people are working.
Unemployment is not a "job creator".
It is meant to be a temporary measure to help a worker out until they can get back to contributing to the economy again.
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