Unemployment Woes

I am not sure that a GOP campaign ad writer could have come up with a better way to communicate the left's idea of Keynesian intervention in the economy. The Onion may have been able to come close.But U.S. Labor Secretary Hilda Solis did it better than any of them could have.

Failing to extend the length of time that unemployment workers are eligible to receive federal unemployment payments “will mean an increase in the unemployment rate.”

Before you do damage to your scalp trying to figure out if this makes sense, rest assured it is true. Just as no longer borrowing or printing money to pay people's grocery bill increases hunger, and no longer borrowing or printing money to pay people's car loans increases immobility, and no longer borrowing or printing money to pay people's house loans increases homelessness.

A finer example of a tautology you will not find.

The argument rests on unilateral demand side thinking. If the demand is not maintained by giving people money that is either borrowed or printed, the businesses who sell goods and services will go out of business. If this works so well, why not just print money and send a pallet to each and every person in the US? Wouldn't this sort of stimulus expand the economy and create tremendous demand?

Ugh. Yes, an increase in borrowing can be a stimulus to demand. But at what cost? Is there a limit to how much borrowing can occur before the debt is overwhelming? Is this wise