Obama’s Responsibility Rhetoric

June 10, 2010

Politicians are masters at saying one thing and doing another. Translation: Politicians make good hypocrites.

A pertinent example is this charge to high-school graduates from a recent speech by President Barack Obama, urging the graduates to:

 Take responsibility not just for your successes; take responsibility where you fall short as well.

Perhaps the 17- and 18-year-old graduates in the room believed the president really meant that. However, one would hope the more informed adults in the room had a collective gasp after Obama uttered those words.

[picapp align=”left” wrap=”true” link=”term=obama+kalamazoo&iid=9054824″ src=”http://view.picapp.com/pictures.photo/image/9054824/president-obama-attends/president-obama-attends.jpg?size=500&imageId=9054824″ width=”234″ height=”189″ /]Such comments flatly fly in the face of policies he has promoted since and prior to coming to the White House. Policies ranging from the bank bailouts to the car bailouts to the seemingly never-ending supply of unemployment benefits to Americans all highlight that Obama believes, in reality, that the government should shield businesses and individuals from the eventual results when they “fall short.” The net result of such a bailout culture is dependence on government and a greater incentive to continue activities that lead to failure — not to mention increasing government debt.

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State Unemployment Funds in Crisis

May 12, 2010

ProPublica has been keeping track of what it deems a “crisis” in state unemployment insurance funds. Here is chart showing the shape of each state:

As I’ve noted before, in some states federally-sponsored unemployment can now include up to 99 weeks. One point they make is that several states are borrowing money from the federal government (money it doesn’t have) to help pay for their part of unemployment funding. More details on this situation from ProPublica are available here.


Subsidizing Unemployment

April 21, 2010

Coincidently or not, President Obama signed a further extension to unemployment benefits on April 15, Tax Day — a move that will cost more tax money. The bill extended some individuals’ benefits to a whopping total of 99 weeks (quick math: That’s nearly two years).

Though initial state unemployment benefits are funded through taxes on employers, federal extensions like this one are funded by the U.S. Treasury (read more details here). Translation: taxpayers are on the hook for subsidizing more weeks of unemployment checks for millions of Americans.

Though earlier this year, the idea of “paygo,” paying for new spending as it is voted on, was agreed on, The New York Times notes the following

… the Senate resolved a stubborn (emphasis added) impasse, deciding the $18 billion cost of the measure could be added to the deficit.

Since when is insisting on actually paying your bills considered “stubborn”? Since politicians decided they could win votes by making more individuals dependent on government subsidization.

And all of this has been done despite the earlier view of one of Obama’s chief economic advisors that unemployment insurance is an actual cause of long-term unemployment. In writing on the causes of long-term unemployment, that advisor, Lawrence Summers, observed the following:

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Paying for Spending Now Insignificant?

February 28, 2010

Somewhere along the line actually requiring government spending to be paid for went out of fashion. Take the case of Sen. Jim Bunning’s (R-KY) recent efforts to hold off another extension of unemployment benefits until Congress could lay out how it would pay for the extension.

Bunning’s efforts were at least temporarily successful, angering many lawmakers. A Fox News report quoted Sen. Dick Durbin (D-IL) lamenting Bunning’s actions by stating the following:

It is unthinkable, unforgivable that we would cut off unemployment insurance payments to these people, that we would cut off COBRA payments, which helps them to pay for their health insurance while they’re unemployed. … And yet, that’s what’s going to happen Sunday night. It’s because the senator from Kentucky has objected to extending unemployment insurance payments and COBRA health insurance payments for 30 days.

Bunning said he was concerned about the level of debt currently heaped up by the federal government. But those not phased by increased government spending (of money it doesn’t have) were fierce with their criticisms of the senator.

Take for example this segment from MSNBC making Bunning out to be little more than a heartless, bitter nut:

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More News on the Unemployment Compensation Problem

January 4, 2010

Another new worry for the new year: increased unemployment compensation taxes for Florida employers. As I’ve blogged about previously, employers could see their taxes for this fund increase to as much as 11 times what they have been paying.

A more recent article notes the likely outcome for small businesses under this increase, predicted by an executive at a staffing firm:

The first things likely to go will be vacation time and sick leave, McLeod said. After those savings are exhausted, more layoffs may be the only option for some companies. “This increased tax is going to cost jobs, running unemployment up even higher,” McLeod said. “And 2011 will be worse on employers if something doesn’t change dramatically.”

Moral of the story: Watch out for those pesky unintended consequences of government intervention. Since unemployment is high, more funds are needed to pay for unemployment benefits. Those increased funds take money away from businesses that may have used the money to hire new employees. The result: increased unemployment and/or decreased benefits.

These unintended consequences can lead to a vicious cycle, all thanks in part to those in government who believe it is their job to fix all of our problems. In reality, their “solutions” to our problems often create new ones or at least make the current problems worse.