Wrong Place For Deficit Line In The Sand

I usually take the conservative side on deficit issues, but on the issue of extended unemployment benefits, the Democrats have it right.  While it is fair for Republicans to point out that Democratic congressional leaders have refused to offer a “clean bill” that would only extend benefits without piling on other, less justifiable Democratic policy priorities, a certain amount of that is the benefit of being in the majority and Republicans should just suck it up.

Traditional conservative skepticism towards long-term unemployment benefits (the extension would make them almost 3 years long) is usually sound, but inapplicable to this case.  Unemployment benefits can and do discourage the search for actual work, but in the present economy, that effect is nullified by the fact that there is very little work to be found anyway.

Moreover, the problem with Democrats’ “stimulus” plans thus far does not apply to unemployment benefits.  The problem with pumping deficit money into the economy has been that it has simply been soaked up rather than spent.  Government mandates that increase capital requirements for banks and financial firms have forced them to horde billions of government stimulus dollars.  Billions more of profits in non-financial firms on the rebound have also been horded because of uncertainty about increasing health care costs and other government mandates restricting employment decisions.  Demand-side stimulus won’t work in this environment.  But the one group that will spend is those who have no other income — the unemployed.

It is time to erase a very badly drawn line in the sand.  Republicans do need to be unafraid to be “the party of no” in the face of continuing demands by some Democrats for ever-expanding entitlement programs.  But the unemployed is the wrong place to start.