The "debate" over whether to pass the extension of benefits as emergency legislation, and thus exempt it from the pay as you go rules, or to require some spending to be cut in order to pay for it highlights the absolute stupidity of Congress.
The amount of money we're talking about here is relatively small. The total amount of money that's required to give a whopping $309 on average to millions of unemployed workers will total around $35 billion for the year. In a country that's facing a trillion dollar deficit, that's chump change.
And the charge that the passage of the bill will inflate the deficit would have more validity if it came from a party that actually exercised fiscal responsibility when it was in control of Congress and the White House. It'd have more credibility if it came from a party that wasn't pushing for the extension of the Bush tax cuts, something that costs a hell of a lot more than the amount required for the extension of unemployment benefits.
It'd have a whole hell of a lot more credibility if the politician the party chose to unveil the proposal to keep the Bush tax cuts had an answer about how to pay for them. When asked repeatedly "how are you going to pay the $678 billion?", Senator Jon Kyl had no answer. Keep in mind that exchange came on the republican leaning Fox News.
That's Congressional stupidity in a nutshell. You've got a Senator crying like a stuck pig about something that will run $35 billion for a year. And yet, that same Senator wants to push for keeping a series of ineffective tax cuts that will cost nearly 20 times more. Some ideologues keep on repeating the lie about how tax cuts create jobs and boost the economy. All you need to do in order to see that's a lie is to compare the 1990s versus the 2000s. Taxes were lower in the 2000s, but there's no question that the 1990s were better economically.
That stupidity is highlighted even more by the return on investment on unemployment versus tax cuts. Take a look at the chart from Moody's Economy.com. There is absolutely no question that extending unemployment benefits provides far more bang for the buck than extending the Bush tax cuts.
We realize that math may be difficult for people like Senator Kyl, but even he should be able to figure out that a return on investment of $0.29 per dollar spent is a hell of a lot worse return on investment than $1.64 per dollar spent. Let's put it this way. The tax cuts that people like Senator Kyl are pushing for will COST the government and the tax payers $0.71 for every dollar provided to the population. On the other hand, extending unemployment benefits will provide the government and tax payers a gain of $0.64 for every dollar spent.
The return on investment from the $678 billion Senator Kyl wants to saddle the country with will be $197 billion. On the other hand, the return on investment from the $35 billion that he says is too expensive will be $57 billion. In other words, unemployment benefits will cost around five percent of what the Bush tax cuts will and they'll provide the economy with 29 percent of what the tax cuts will.
If you were a CEO of a company, and one of your managers came to you and said that he wanted to spend money on something with an ROI of $0.29 per dollar over something that provides an ROI of $1.64 per dollar, you'd fire him. And if he told you that he wanted to spend 20 times more on that low ROI project, you'd call security and have him escorted out on the spot so that he couldn't do more damage to your company.
But in Congress, that kind of mindset is just fine. The debate over the unemployment benefits highlights it and show just how idiotic Congress can be.
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