Extension of Jobless Benefits Has Downside

Published August 25, 2010

While high unemployment is a pressing problem, continuing to pile up federal debt by extending unemployment insurance will do little to improve the economy and actually undermines the purpose of unemployment insurance itself.

Illinois provides a good example of what happens when a state ignores the reality of unemployment insurance bailouts, they now face a billion-dollar hit to an already strained budget (“State owes $2.2 billion to feds for unemployment benefits,” Aug 19).

While state legislators and some members of Congress like to refer to unemployment coverage as “stimulus,” the reality is that unemployment insurance is a liability that taxpayers have to pay back through economy-killing taxes.

Endless extensions of benefits, while politically popular, undermine the idea that unemployment insurance is something employers and employees pay into and collect when something bad (a layoff) happens. Unemployment insurance should not become another welfare program.

Matthew Glans
Midwest director of the Center on Finance, Insurance and Real Estate
The Heartland Institute