With deficits around $1 trillion dollars, and with unemployment benefits at $25 billion for three months (or $100 billion per year), that means that unemployment represents about 10% of the trillion dollar deficit. That's huge.
I can state, with perfect certainty, that unemployment benefits, however meager they may be, are a huge disincentive to looking for work. How do I know? Because I had to close 12 stores in Houston in 2008, and I wrote letters of recommendation for each and every one of my store managers in order to help them get jobs. I was informed by almost every one of them that they intended to take their unemployment benefits for as long as possible...and that is exactly what they did. When benefits were extended to 99 week, they stayed on unemployment. When the unemployment ran out, they started looking for work, only to find that employers correctly ascertained that they had just spent almost two years out of the workforce voluntarily, which calls into question their commitment to work and career.
Unemployment insurance is an unmitigated disaster for the unemployed.
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