While it is true jobless benefits have a stimulative affect on the economy but as Paul Krugman writes.
But while raising taxes when unemployment is high is a bad thing, there are worse things. And a cold, hard look at the consequences of giving in to the G.O.P. now suggests that saying no, and letting the Bush tax cuts expire on schedule, is the lesser of two evils…
America, however, cannot afford to make those cuts permanent. We’re talking about almost $4 trillion in lost revenue just over the next decade; over the next 75 years, the revenue loss would be more than three times the entire projected Social Security shortfall. So giving in to Republican demands would mean risking a major fiscal crisis — a crisis that could be resolved only by making savage cuts in federal spending.And we’re not talking about government programs nobody cares about: the only way to cut spending enough to pay for the Bush tax cuts in the long run would be to dismantle large parts of Social Security and Medicare.
Obama, tries to sound like a hero but it appears he never really meant what he said about the tax cuts.
“I’m not willing to let our economy slip backwards just as we’re pulling ourselves out of this devastating recession,” said Obama. “I’m not willing to see 2 million Americans, who stand to lose their unemployment insurance at the end of this month, be put in a situation where they might lose their home, or their car, or suffer some additional economic catastrophe. So, sympathetic as I am with those who prefer a fight over compromise, as much as the political wisdom may dictate fighting over solving problems, it would be the wrong thing to do.”
