Monday, March 1, 2010

Senator Bunning is Right on Both Counts

Current law provides 99 weeks of unemployment benefits. Research on search efforts of the unemployed concludes that interest in looking for a job is relatively dormant until the last four weeks before unemployment compensation runs out. The benefits run as high $ 30,000 annually in some states (New Jersey, for example). Why work?

Senator Jim Bunning of Kentucky, who is retiring this year and not running for re-election, is currently filibustering a bill to "temporarily" extend long term unemployment benefits. Bunning says the money should come out of the Stimulus Act and not be a new addition to the deficit. Bunning is right. But, he is also right that long term unemployment benefits are a bad idea. It is a subsidy to the unemployed and whatever you subsidize you will get more of. Two years is enough for unemployment benefits. Beyond that, you are simply creating a new welfare entitlement.