The Cliffs of Unemployment, Robert Reich and BleachersFollow

What if he said he's "absolutely right" or "it's a simple fact"? Would that help?

I think I'd have to say "come on", "everybody knows" or "obviously".

so much irony it burns

Should sell it to some scrap metal guy. I hear Joph pays well for that stuff.

I'm reasonably sure that attempting to calculate the ratio of times you've actually produced such an argument in a thread to the number of times you've insisted you don't have to because "I've already done it", or "it's proven math", would produce a divide by zero error.

Why not humor us and actually make the argument? One that doesn't just involve you linking to someone else saying that it's the right thing to do. Actually use your own words and tell us why you think extending unemployment is a good idea from a macroeconomic point of view. You're long on insisting you're right and incredibly short on actually arguing your case.

Oh. And you could start by showing that you have even the slightest clue what the hell you're talking about. It really does look like you just spout terms and hope no one calls you on them. You are, for example, aware that the zero lower bounds issue doesn't have anything at all to do with extending unemployment benefits, right? Well, it does, but only if we assume that none of the currently unemployed would find employment even remotely close to their current benefits if those benefits were eliminated.

But that's not the case, is it? In fact, there's a strong argument (one I even made) that by extending unemployment benefits, you create an opportunity cost to working. This is pretty easy to grasp: If you can receive $X/month from unemployment, or $X/month by working full time, most people will choose to stay on unemployment (cause same dollars with zero work is better than same dollars and working 40h/week). Most people will only choose to leave unemployment and take a job *if* the pay for the job is significantly greater than the unemployment benefits.

Even if we accept every single bit of the assumptions you're making about economic stimulus via consumption spending, this consumption is going to be the same if someone is receiving $X via unemployment benefits or via wages (didn't I already make this exact same point?). So simply saying that consumption dollars are necessary for economic growth doesn't allow us to conclude that extending unemployment benefits is good for economic growth. In fact, we can make a reasonable case that if we were to drop current long term unemployed from the roles that they would obtain a total amount of wages equal to or even greater than the total dollars we're currently transferring to them via unemployment benefits, and thus the consumption effect would remain the same or even increase.


The difference, which I clearly stated, and which you (and the theories you keep referring to) ignore completely, is that when the person receives that money via wages, he's doing so in return for labor valued equal to or greater than the dollars he receives. Thus, whether we think that consumption causes economic growth or not, we know we're creating economic growth because GDP is literally calculated by adding up the total dollar amounts of the productive output of the entire economy. Thus, every dollar these guys earn in wages also shows up as new GDP growth. We get "growth" right off the bat. We produce more stuff.

That's what's needed to create true economic growth and recovery. We need our economy to both increase the amount of stuff it is producing *and* the amount of that stuff produced that is consumed. Extending unemployment only accomplishes half of that. But ending unemployment for those on the long term roles accomplishes both halves.

Just don't know how much more clearly I can state this.

The difference, which I clearly stated, and which you (and the theories you keep referring to) ignore completely, is that when the person receives that money via wages, he's doing so in return for labor valued equal to or greater than the dollars he receives. Thus, whether we think that consumption causes economic growth or not, we know we're creating economic growth because GDP is literally calculated by adding up the total dollar amounts of the productive output of the entire economy. Thus, every dollar these guys earn in wages also shows up as new GDP growth.

Do you want me to explain why wages to GDP isn't a 1 to 1 relationship or do you want to modify your provably wrong statement? Let me know, then we can move on to your other errors.


Edited, Dec 12th 2013 8:48pm by Smasharoo

Yes. Please do. BTW, you're correct that they aren't a 1 to 1 relationship. Wages are usually lower than GDP growth. But by all means, knock yourself out trying to argue that a guy earning $30k/year (in a free and sustained labor market) is not generating an increase in GDP equal to or greater than $30k.

I honestly eagerly await this. I predict you'll insist that it's beneath you to explain it, or you'll just call me names, or find some other reason to not actually do it, but I really would love if it you'd actually do so. Not going to hold my breath though.

Edited, Dec 12th 2013 5:56pm by gbaji

I honestly eagerly await this. I predict you'll insist that it's beneath you to explain it, or you'll just call me names, or find some other reason to not actually do it, but I really would love if it you'd actually do so. Not going to hold my breath though.

Sorry, I sort of missed this. You want me to explain why there isn't a 1 to 1 relationship when you agree there isn't a 1 to 1 relationship?

In fact, we can make a reasonable case that if we were to drop current long term unemployed from the roles that they would obtain a total amount of wages equal to or even greater than the total dollars we're currently transferring to them via unemployment benefits, and thus the consumption effect would remain the same or even increase.

Would you like to modify this provably false statement or would you like me to cite multiple data sources demonstrating it to be incorrect?

You are, for example, aware that the zero lower bounds issue doesn't have anything at all to do with extending unemployment benefits, right?

I'd ask if you wanted to walk this back, but you seem to have given up, so I'll just explain: The inability of the Fed to lower interest rates further and spur job creation by lowering the risk of borrowing money accordingly makes it more difficult for industry to take on hiring risk. In this way, the fed funds rate hitting the ZLB has something to do with extending unemployment benefits with the government taking on the borrowing risk where industry may not be able to or is choosing not to. See also: Japan in the 1990s and pretty much any labor economics paper written about that.

Maybe make some effort to read the points I've already made before you post something I already debunked completely? Just a thought.

I suppose. An incorrect thought. There's no GDP benefit to wages over government benefits. None. Again, I'll ask if you understand why. I assume you don't, but watching you try is part of the fun for all of us.

I'm sure you could cite multiple sources claiming that it's incorrect, just as I can cite multiple sources claiming that it is correct.

Proceed.

Why? I just told you that it's meaningless. How about you show you actually understand the subject and talk about it in your own words, like I've asked you several times now? Or is that too hard for you?