Paying People Not to Work Is Not an Economic Stimulus

Nancy Pelosi by AFGE is licensed under Flickr CC BY 2.0
Back in 2009, Nancy Pelosi infamously declared the best way to revive the economy was to dole out ever more generous food stamps and unemployment benefits. The more people collecting welfare the better. At the time, this notion seemed laughable. Now this economic illiteracy seems to have become a conventional wisdom.

This was a headline in the New York Times recently: “End of $600 Unemployment Bonus Could Push Millions Past the Brink.”

Here was the lead on the “news” piece: “When millions of Americans began losing their jobs in March, the federal government stepped in with a life preserver: $600 a week in extra unemployment benefits to allow workers to pay rent and buy groceries, and to cushion the economy.

With economic conditions again deteriorating, that life preserver will disappear within days if Congress doesn’t act to extend it. That could prompt a wave of evictions and inflict more financial harm on millions of Americans while further damaging the economy.”