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Passions in Poetry

Trapped in the Net

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Huan Yi
Member Ascendant
since 10-12-2004
Posts 6334
Waukegan


0 posted 06-18-2012 03:33 PM       View Profile for Huan Yi   Email Huan Yi   Edit/Delete Message      Find Poems  View IP for Huan Yi

.


University of Chicago Prof. Casey Mulligan, author of the soon-to-be-released The Redistribution Recession, found that without the rapid increase of the social safety net during the economic crisis, unemployment per capita would have increased by 4 percentage points, half of the 8 point jump the U.S. experienced.

“The less painful it is to be without a job, the less reasons employees and employers have to work together to save a job,” Mulligan said. “By making the safety net more generous, you’re going to have more businesses close up because of higher costs, and you’re going to see employees who will refuse to work if their wage is going to be less than their unemployment.”

The stimulus provided an $80 pay bump in all food stamp benefits and allowed laid-off workers to remain on unemployment insurance up to 99 weeks, 26 of which are paid in large part by employers. The impact of such policies was immediate. In 2009, the average unemployed household took in $16,000 in benefits—a 60 percent increase from the pre-recession payout, according to Mulligan.

The benefits came at a price. The effective marginal tax rate for low-income households—the rate at which each additional dollar in income is taxed—rose from 40 percent in 2007 to 48 percent in 2009.

The increased costs to the labor market provided unemployed workers with little incentive to get back on their feet immediately, and deterred current employees from taking pay cuts in a down economy, according to Mulligan.

“When the White House pitched the so-called stimulus bill, they portrayed unemployment and food stamps as free and said they would make the labor market better,” Mulligan said. “That is not only wrong, it is dishonest to those in the labor market who need jobs.”

Other economists have come to similar conclusions. John Mueller, an economics fellow at the Ethics and Public Policy Center, found that the 8.2 percent unemployment rate would be 3 percent lower without the rapid expansion of the safety net.

“Any social benefits that are conditioned on being unemployed tend to ramp up unemployment,” Mueller said. “It’s only rational that a worker will tend to look hardest when the benefits have run out; it’s not lazy, purely rational.”

http://freebeacon.com/trapped-in-the-net/


I agree with that last line; you assure most
people,(including myself),of a certain level
of money and benefits regardless, and they
would just as soon spend their one lives
on something they like doing or nothing
than on work for which they have to be paid
to do.  The problem is who foots the bill.


"The benefits came at a price. The effective marginal tax rate for low-income households—the rate at which each additional dollar in income is taxed—rose from 40 percent in 2007 to 48 percent in 2009."


Someone please explain this . . .
how is it taxed?

.
Grinch
Member Elite
since 12-31-2005
Posts 2710
Whoville


1 posted 06-18-2012 04:51 PM       View Profile for Grinch   Email Grinch   Edit/Delete Message      Find Poems  View IP for Grinch

"Much more compelling evidence can be found by direct examination of the 2008/10 data, which shows no support for UI related work disincentive effects."

http://www.peri.umass.edu/fileadmin/pdf/working_papers/working_papers_251-300/W    P257_revised.pdf

.
Huan Yi
Member Ascendant
since 10-12-2004
Posts 6334
Waukegan


2 posted 06-18-2012 06:54 PM       View Profile for Huan Yi   Email Huan Yi   Edit/Delete Message      Find Poems  View IP for Huan Yi

.


"Other economists have come to similar conclusions"


So they're wrong in their reading of data?

How does it make sense that being given
money for not working is not a disincentive
to seeking employment?


.
Essorant
Member Elite
since 08-10-2002
Posts 4689
Regina, Saskatchewan; Canada


3 posted 06-19-2012 02:36 PM       View Profile for Essorant   Email Essorant   Edit/Delete Message      Find Poems   Click to visit Essorant's Home Page   View IP for Essorant

I support the government freeing as many slaves as possible.  

Huan Yi
Member Ascendant
since 10-12-2004
Posts 6334
Waukegan


4 posted 06-19-2012 03:27 PM       View Profile for Huan Yi   Email Huan Yi   Edit/Delete Message      Find Poems  View IP for Huan Yi

.


And who is the "government"?


.
Denise
Moderator
Member Seraphic
since 08-22-99
Posts 23002


5 posted 06-23-2012 07:03 PM       View Profile for Denise   Edit/Delete Message      Find Poems  View IP for Denise

In Socialist States the government = Big Daddy.

In a Free Society the government = We The People.
 
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