Arianna Huffington’s indignation is half right, for once. She’s right to call it a “terrible calamity” that millions of Americans are facing the bleak prospect of indefinite joblessness. And she is right to be frustrated at a political system “incapable of doing the right thing.” But then she slips into Arianna’s fantasy land.
The immediate object of Arianna’s distress is Congress’s inability to extend welfare benefits for unemployed workers. Having long since exhausted the insurance element of the program, and despite clear evidence that these benefit payments delay economic recovery, it makes sense to extend them. As long as Obama and friends continue their anti-growth, anti-business policies, the unemployment rate will remain around 10 percent, and so unemployed workers have little hope of finding a job. Incapable of doing the right thing indeed!
In the face of such a bleak economic landscape, few would argue against extending the benefits, but Congress is also responding to the rational and growing national unease over deficit spending. Members are rightly demanding the legislation be offset with spending cuts elsewhere. Obama and friends think otherwise, and so the legislation — and the welfare benefits — languish.
The budget deficit is now so large, Arianna asks, what difference could a few more billions in spending make? It’s precisely that kind of thinking that got the deficit so high in the first place. Congress didn’t just pass a bill raising spending by a trillion dollars in a year. They did it a few billion at a time, the same way those who max out on their credit cards get into trouble.
– J. D. Foster is Norman B. Ture senior fellow in the economics of fiscal policy at the Heritage Foundation.