Economist: Expiring Unemployment Benefits Would Help Economy
WASHINGTON – An economist with experience on Capitol Hill has argued that the way to help increase employment would be to allow the extensions to unemployment benefits to expire.
John D. Mueller, director of the Economics and Ethics Program at the Ethics and Public Policy Center, told The Christian Post Wednesday that the removal of recent extensions on unemployment benefits would help reduce unemployment in America.
"The thing that would do the most to bring the unemployment rate down and down quickly would be to reverse the changes that were made just a few years ago," he argued. "If Congress were to simply allow the extended benefits to expire you would find the unemployment dropping like a rock."
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"During that period, the GDP would also rise sharply," said Mueller, noting the connections between employment rates and gross domestic product.
Mueller was the key speaker at an event sponsored by the Family Research Council titled "Redeeming Economics: How Federal Budgets Affect the American Family."
His comments come as more people are applying for unemployment benefits. The Labor Department reported Thursday that the number of applications increased last week by 13,000 to a seasonally adjusted 380,000.
In his hour long presentation, the economic adviser to former Congressman Jack Kemp argued that unemployment benefit extensions increased unemployment. According to Mueller, unemployment benefits were originally set at 26 weeks and worth half a person's income. However, the federal government recently extended the time period to about 100 weeks.
"When you include all those receiving the extended benefits that's the reason [the unemployment rate] gets about three percentage points higher," he asserted.
"So when you subsidize something, you get more of it. And we have been subsidizing unemployment; I'm sure with the best of intentions."
Rob Schwarzwalder, FRC senior vice president, dubbed Mueller's opinions as a "more distinguished view."
"[Mueller] understands that the family unit is the greatest generator of economic growth in existence," said Schwarzwalder. "Common sense would indicate that the American is the actual starting point for any discussion on the economy."
Mueller touched base on multiple economic topics, including a quick overview of the history of western economics, how current economic issues would be handled by the late Congressman Kemp, and a comparison of the budgets proposed by President Barack Obama and Congressman Paul Ryan (R-Wis.)
According to the economist, the problem with "modern existing economic theory" is that it is influenced by 18th century Scottish social philosopher Adam Smith, who did not incorporate crucial aspects of human behavior such as consumption and distribution, whereas earlier models influenced by the works of Augustine of Hippo, Aristotle, and Thomas Aquinas did.
"In oversimplifying economic theory, Smith replaced these elements of distribution with the mere and often false assumption that, as he put it, 'every individual intends only his own gain," said Mueller.
"Karl Marx's collectivist ideology collapsed all justice to distributive justice as if all good were both common and political. Smith's individualist ideology collapsed all justice to justice in exchange, as if all good were personal, private."
