The Unemployment-Benefit Question | National Review

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The supply-siders at the Committee to Unleash Prosperity write in their daily email:

Even Michael Strain of the once-free market-oriented American Enterprise Institute told the NYT he doesn’t think cutting the $600 a week benefits on top of normal UI payments makes sense: “That’s a lot of income to just withdraw from the economy really suddenly,” he opined.  “Right now there’s no question that the positive economic effects of those payments are outweighing the negative economic effects.” By this warped logic we should start paying unemployed workers $6,000 a week and we will really have a rip-roaring recovery.

I think the CUP may be misunderstanding Strain, who is my colleague at AEI and Bloomberg Opinion, and sometime collaborator at NR. Strain’s view, which seems right to me, is that sustaining the current level of unemployment benefits for too long would hinder a robust recovery. He wants benefits to be scaled back. Hence his recent article, “How Congress can scale back unemployment benefits.” His quote in the Times concerned going immediately from $600 in extra unemployment benefits to zero this summer.

Now if one believes that anyone who supports a dollar of unemployment benefits may as well support $6,000 a week, then Strain’s logic is off. He ought to support either infinitely high benefits or no benefits. Notice, though, that the Coalition isn’t pushing for the abolition of unemployment benefits, just the immediate end of the COVID-19-related supplement to them, so it’s open to the same objection. They were once free-market-oriented!

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It’s not a persuasive objection. Strain’s preferred alternative of a gradual reduction that responds to economic conditions seems to me superior to an immediate $600/week drop. But even if I am (and he is) wrong about that, there are competing considerations to balance and their relative force will vary depending on the level of the benefits. Someone who is on record saying that $600/week is too high is not logically committed to going to $6,000.

Ramesh Ponnuru is a senior editor for National Review, a columnist for Bloomberg Opinion, a visiting fellow at the American Enterprise Institute, and a senior fellow at the National Review Institute.




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