4 ms·

That 4% difference is absolutely massive. Further, these benefits have to be paid by someone somewhere. These benefits are being paid by all the rest of us in t

That 4% difference is absolutely massive. Further, these benefits have to be paid by someone somewhere. These benefits are being paid by all the rest of us in the form of inflation eating way our income.

brandmeyer 5y ago
> That 4% difference is absolutely massive. 4% of the entire workforce is massive. 4% of unemployed workers who were previously receiving unemployment benefits is irrelevant. If you zoom out, you'll see that the biggest drops in unemployment benefits weren't in the 2021Q2, they were in 2020Q4. https://www.statista.com/statistics/284857/total-unemployment-benefits-paid-in-the-us/ https://www.statista.com/statistics/284857/total-unemploymen...
bumby 5y ago
We could probably debate whether 4% is "massive" in the context of COVID unemployment levels, but I'll sidestep that because I don't think it will actually resolve anything. What I think is the better question is whether that 4% dip was better for the respective economies in the context of the aid they had to give up. It seems to me it probably wasn't a good tradeoff if the goal was to improve the economy. I also understand it may be a moral argument rather than an economic one, but that's another one that could probably be debated without resolution. >These benefits are being paid by all the rest of us in the form of inflation eating way our income. I agree, but that's also the price to be paid by living in a society. We could just remove all safety nets whatsoever and deal with whatever instability results, but I don't think that's in most people's best interest. The point of the discussion is finding the right balance that provides a moral yet stable economy.
- murgindrag 5y ago
  I expect inflation to remain high for a while, and I think concerns about it (if not for self-fulfilling psychological, which are very real and significant) are overblown. I think this stimulus, and the resulting inflation, DID help the economy, relative to the alternatives. The critical thing was to avoid structural damage: - Businesses going under - People losing jobs - Mortgages going under ... and so on. All of this DOES directly impact the productive output of the economy. Inflation does distort the economy a little bit. It makes some of us poorer (those with cash), some of us richer (those with debt), and leaves some neutral (this with hard assets). But I think this distortion pales relative to the alternative.
  - silexia 5y ago
    Business is going under is actually a good thing. It frees up market space for new entrepreneurs and new businesses to be able to get going and make newer better offerings. The last two recessions all of the big companies have been bailed out, which means that we have the same bad practices and bad CEOs still in charge of our economy. Let them go bankrupt and then we will have fresh ground for entrepreneurs to flourish.
    - bumby 5y ago
      >Let them go bankrupt and then we will have fresh ground for entrepreneurs to flourish. I agree to this in some contexts, but I also think it's sometimes used with too broad of a brush. It seems to ignore the time lag that means sometimes things can get really bad before they get better. Sure, allowing banks and automotive manufacturers to go under could create "fresh ground for entrepreneurs to flourish." But it could also create decades of depression/recession effects before that flourishing happens. We're currently seeinng the supply chain effects that people didn't really anticipate well. As someone from the rust belt, there are an awful lot of tangentially related manufacturers who will also go away with the automotive sector, which has ripple effects in a ton of other industries. Protracted economic depressions tend to create "fresh ground" for despots to "flourish" as well.
- reedjosh 5y ago
  > I agree, but that's also the price to be paid by living in a society. I really dislike this point. I keep seeing it as a justification for more government control, typically without real justification. > We could just remove all safety nets whatsoever and deal with whatever instability results, but I don't think that's in most people's best interest. Has welfare been in some way proven to increase stability? Seattle, Portland, and SF all have strong welfare programs, but they seem to me to currently be much less stable than other cities.
  - bumby 5y ago
    The larger context is that society is a give and take. I have an old, likely out-of-print, book called "Your Rugged Constitution" that I got from an old Marine. What I like about that book is that it frames each part of the Constitution, not just in terms of what one gets from the government but also what one is expected to give up. I get concerned when people only focus on one side of that equation. I don't think it should be used as a catch-all, but as a reasoned and balanced approach. It may be used as a justification for "government control", but hopefully people recognize that there is an expectation for something to be received in terms of what was given. It's up to society to determine whether that's a good trade, not to automatically disregard the option because of some "government control" boogeyman. Take the Fed which is such a big part of this discussion. Society gives the Fed certain levers to affect the economy and monetary policy. In return, society gets more stabilized unemployment and inflation to limit boom/bust cycles. Society has determined that is a reasonable tradeoff. Likewise, we give the Congress the ability to levy taxes and in exchange we expect to be provided common defense and general welfare. >Has welfare been in some way proven to increase stability? Seattle, Portland, and SF all have strong welfare programs, but they seem to me to currently be much less stable than other cities. It gets harder to study because of the larger number of confounding factors as you get to larger groups (city, state, or federal levels). There's certainly evidence that social safety nets provide stability at the family level and evidence that safety nets like unemployment insurance enhance stability as well.

brandmeyer 5y ago

> That 4% difference is absolutely massive. 4% of the entire workforce is massive. 4% of unemployed workers who were previously receiving unemployment benefits is irrelevant. If you zoom out, you'll see that the biggest drops in unemployment benefits weren't in the 2021Q2, they were in 2020Q4. https://www.statista.com/statistics/284857/total-unemployment-benefits-paid-in-the-us/ https://www.statista.com/statistics/284857/total-unemploymen...

bumby 5y ago

We could probably debate whether 4% is "massive" in the context of COVID unemployment levels, but I'll sidestep that because I don't think it will actually resolve anything. What I think is the better question is whether that 4% dip was better for the respective economies in the context of the aid they had to give up. It seems to me it probably wasn't a good tradeoff if the goal was to improve the economy. I also understand it may be a moral argument rather than an economic one, but that's another one that could probably be debated without resolution. >These benefits are being paid by all the rest of us in the form of inflation eating way our income. I agree, but that's also the price to be paid by living in a society. We could just remove all safety nets whatsoever and deal with whatever instability results, but I don't think that's in most people's best interest. The point of the discussion is finding the right balance that provides a moral yet stable economy.

murgindrag 5y ago
I expect inflation to remain high for a while, and I think concerns about it (if not for self-fulfilling psychological, which are very real and significant) are overblown. I think this stimulus, and the resulting inflation, DID help the economy, relative to the alternatives. The critical thing was to avoid structural damage: - Businesses going under - People losing jobs - Mortgages going under ... and so on. All of this DOES directly impact the productive output of the economy. Inflation does distort the economy a little bit. It makes some of us poorer (those with cash), some of us richer (those with debt), and leaves some neutral (this with hard assets). But I think this distortion pales relative to the alternative.
- silexia 5y ago
  Business is going under is actually a good thing. It frees up market space for new entrepreneurs and new businesses to be able to get going and make newer better offerings. The last two recessions all of the big companies have been bailed out, which means that we have the same bad practices and bad CEOs still in charge of our economy. Let them go bankrupt and then we will have fresh ground for entrepreneurs to flourish.
  - bumby 5y ago
    >Let them go bankrupt and then we will have fresh ground for entrepreneurs to flourish. I agree to this in some contexts, but I also think it's sometimes used with too broad of a brush. It seems to ignore the time lag that means sometimes things can get really bad before they get better. Sure, allowing banks and automotive manufacturers to go under could create "fresh ground for entrepreneurs to flourish." But it could also create decades of depression/recession effects before that flourishing happens. We're currently seeinng the supply chain effects that people didn't really anticipate well. As someone from the rust belt, there are an awful lot of tangentially related manufacturers who will also go away with the automotive sector, which has ripple effects in a ton of other industries. Protracted economic depressions tend to create "fresh ground" for despots to "flourish" as well.
reedjosh 5y ago
> I agree, but that's also the price to be paid by living in a society. I really dislike this point. I keep seeing it as a justification for more government control, typically without real justification. > We could just remove all safety nets whatsoever and deal with whatever instability results, but I don't think that's in most people's best interest. Has welfare been in some way proven to increase stability? Seattle, Portland, and SF all have strong welfare programs, but they seem to me to currently be much less stable than other cities.
- bumby 5y ago
  The larger context is that society is a give and take. I have an old, likely out-of-print, book called "Your Rugged Constitution" that I got from an old Marine. What I like about that book is that it frames each part of the Constitution, not just in terms of what one gets from the government but also what one is expected to give up. I get concerned when people only focus on one side of that equation. I don't think it should be used as a catch-all, but as a reasoned and balanced approach. It may be used as a justification for "government control", but hopefully people recognize that there is an expectation for something to be received in terms of what was given. It's up to society to determine whether that's a good trade, not to automatically disregard the option because of some "government control" boogeyman. Take the Fed which is such a big part of this discussion. Society gives the Fed certain levers to affect the economy and monetary policy. In return, society gets more stabilized unemployment and inflation to limit boom/bust cycles. Society has determined that is a reasonable tradeoff. Likewise, we give the Congress the ability to levy taxes and in exchange we expect to be provided common defense and general welfare. >Has welfare been in some way proven to increase stability? Seattle, Portland, and SF all have strong welfare programs, but they seem to me to currently be much less stable than other cities. It gets harder to study because of the larger number of confounding factors as you get to larger groups (city, state, or federal levels). There's certainly evidence that social safety nets provide stability at the family level and evidence that safety nets like unemployment insurance enhance stability as well.