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Thursday, 24 June 2010

Comments

Rick Richman
The ironic thing is that by extending jobless benefits, the government inevitably extends joblessness, because the benefit removes an incentive to seek a job (which will end the benefit). Economists recognize it as the moral hazard of insurance: it is necessary to have insurance, but it can also cause an increase in the thing insured. And the idea of a government that has no money spending money to provide benefits that others will have to pay for is itself a moral hazard. It would be better to cut employment taxes so that businesses could have more funds to retain their employees and hire new ones.

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