4 ms·
Yes, the first 26 weeks are insurance, but the remaining weeks are federal welfare checks paid for with borrowed money.
by watchandwait 16y ago
Yes, the first 26 weeks are insurance, but the remaining weeks are federal welfare checks paid for with borrowed money.
- tptacek 16y agoIt is a huge oversimplification to say that unemployment benefits are "paid with borrowed money". There is an economic calculation that pairs with the humane calculation behind unemployment benefits. To wit: people are not going to be allowed to starve in any case (there is a floor to our society's capability of being coldly rational). Furthermore, becoming homeless imposes additional costs across the economy (simplest case: the direct expense of eviction, lost rent; more generally, deadweight loss to the whole economy). Finally, if a significant portion of those in the "welfare check" phase of unemployment will end up employed, but would not end up consistently employed without that cushion, society has to factor in the cost of additional long-term unemployed people.
- rmk 16y agoI think it's okay to extend unemployment benefits to a longer period, but 99 weeks looks like it is excessive. Also, perhaps, people who spend longer than the 26 weeks on unemployment benefits should be taxed at a higher rate when they gain employment. It's a little like the risk-based system used in insurance. The risk that your reservation wage increases probably increases with the time you spend getting benefits, so just tweak future taxes based on that risk.