Democrats run around saying the economy is GREAT but also claim things are SO bad that we need to renew Unemployment Insurance for 1.6 million people. Democrats, using the Twitter hashtag #RenewUI, claim that renewing UI will also help the economy in general.
But here is the problem:
As per the CBO (see chart below), total Unemployment Insurance spending for three years 2005 through 2007 COMBINED was maybe $100 billion, but from 2009 through 2012 however, the average per year spending was well-above $100 billion! UI spending (State and Federal Government extensions included) more than tripled under Obama compared to the years leading up to him, yet we have today more unemployed people than before.
Obviously, renewing UI is not exactly a job producer.
Why?
Simple.
If you work the new “full time” of 35 hours a week at a rate of $15 an hour (no, not minimum wage. We are talking here $15 an hour), your gross pay is $525. But in a dozen of states if you are “looking” for work, you can get more than $525 UI per week! In 19 other states, you can get more than $400 a week simply for “looking” for a job. Why would a sane person work 35 hours a week to earn pre-tax $525 when “looking” for a job in the form of watching TV gets you $400-$629 per week for 26, 73 or 93 weeks (depending on State)?
Indeed “no one wants to live on $400 a week” but few want to work for $525 when you can sit at home for more money.
This Stimulus economy KILLED income so people stay home collecting UI instead of “doing jobs Americans wont do.” Indeed, why would they do those jobs? UI, as long the check flow, is easier.
Here is the CBO chart. Please take note of the numbers and continue reading below:
Over the weekend the Democrats argued on Twitter that during the Bush presidency, we didn’t offset UI spending with cuts someplace else in the Budget so why do we need to do it now under Obama in 2014?
Um, the chart tells you why! UI spending under Bush (aside from late 2008), peaked in 2003 somewhere in the mid $50 billion range, but the lowest year in Obama’s first term was almost $100 billion. Perhaps, just PERHAPS, this is one difference why #RenewUI under Obama should not be the same as under Bush.