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This criticism also applies to unemployment benefits in western European countries. If a large chunk of the population suddenly becomes unemployed, then the gov
by jknz 9y ago
This criticism also applies to unemployment benefits in western European countries. If a large chunk of the population suddenly becomes unemployed, then the gov has less tax revenue but more employment benefits to cover. Unemployment benefits cannot be guaranteed without either expanding the national debt or printing money.
A sane government behavior would be to spend in year n the known tax revenue of year (n-1), and nothing more.
- ZeroGravitas 9y agoAnd this is in fact sometimes suggested as one of the key benefits. If an area suddently has a lot of people out of work with no safety net it causes a ripple effect as they curtail their spending massively at local businesses, and the next domino gets toppled. With unemployment benefit the goverment automatically injects cash into the area to forstall this outcome.