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I don't understand your rebuttal, how does increased spending on social programs lead to higher unemployment? Are you suggesting that increased social spending
by gph 11y ago
I don't understand your rebuttal, how does increased spending on social programs lead to higher unemployment? Are you suggesting that increased social spending leads to people tactically becoming unemployed in order to gain benefits while not working?
- nickff 11y agoRomer and Romer showed that higher taxes lead to lower growth and vice-versa; the additional taxes required to finance the social program spending will sooner or later lead to reduced opportunities for employment.[1] Others have shown that a larger "social safety net" leads to higher unemployment for a variety of reasons.[2][3] It is also logical that people's aversion to unemployment is proportional to its cost (to them), and that if it is less costly, they will expend less time and effort in the stressful, taxing, and unpleasant task of looking for work. [1] http://eml.berkeley.edu/~dromer/papers/RomerandRomerAERJune2010.pdf http://eml.berkeley.edu/~dromer/papers/RomerandRomerAERJune2... [2] http://www.newyorkfed.org/research/staff_reports/sr646.pdf http://www.newyorkfed.org/research/staff_reports/sr646.pdf [3] http://time.com/9009/unemployment-is-worse-than-death/ http://time.com/9009/unemployment-is-worse-than-death/ (the point is made more thoroughly in the author's book)