Glenn Reynolds has done a series of posts on economic news at InstaPundit under the heading “Unexpected!” The failure of the administration’s liberal economic policies to bear fruit–the fact that, on the contrary, they have worsened our economic problems–is always unexpected to those who, apparently, have no knowledge of economic history. Some stories, though, are not just foreseeable but inevitable. This one, from the New York Times, is in that category: Job Loss Looms as Part of Stimulus Act Expires.
Tens of thousands of people will lose their jobs within weeks unless Congress extends one of the more effective job-creating programs in the $787 billion stimulus act: a $1 billion New Deal-style program that directly paid the salaries of unemployed people so they could get jobs in government, at nonprofit organizations and at many small businesses. …
The money that pays Mr. Davis’s salary, and the salaries of tens of thousands of other people around the country, will dry up after next Thursday, when the welfare program in the stimulus act that pays the bills for those jobs is set to expire. While the Obama administration and Democrats in Congress want to extend the program, they are meeting stiff resistance from Republicans, many of whom oppose all things stimulus.
So, this is a surprise to whom, exactly? When the stimulus bill poured many millions of dollars into subsidizing employment by state and local governments, countless commentators pointed out that the impact would be temporary at best, since the subsidy would inevitably run out, leaving those governments exactly where they were in the first place–either unwilling or unable to hire the workers in question on a long-term basis. The workers, meanwhile, would only have deferred the need to find a job that will support them and their families for the long haul.
Now, the Times reports that Democrats want the subsidies extended. Naturally. But for how long? Do they want Washington to subsidize indefinitely employment that is otherwise uneconomic? The federal government could pay people to dig holes and fill them in again, and most Democrats, I suspect, would consider that a stimulus to the economy.
The case is much the same with respect to the unprecedented extensions of unemployment benefits that have been enacted by the Democratic Congress. Most Democrats, I suspect, don’t understand why such benefits should ever expire. Economists and many others with common sense, meanwhile, warned that extensions of unemployment benefits would help keep unemployment high. That has turned out to be true, but don’t expect the Dems to catch on any time soon.