Our pathological meanness to the unemployed is just bad economics

A lot of attention is being focused on the Eurozone at the moment given the scale of the economic and social crisis that is unfolding there. It is clear that the unemployed and other pension recipients are being made to pay very significant costs for the policy folly imposed upon them by the Euro political leadership. However, the mean-spirited treatment of the disadvantaged is not confined to Europe. In the US, for example, the Congress is soon to debate and vote on a serious reduction in income support for the already beleaguered unemployed. There is a tendency to think about this from the perspective of a commitment to social democracy as being immoral, iniquitous, and a violation of the human rights of the disadvantaged. While I have great sympathy with all of those emphases, there is an easier attack that can be mounted on cutting unemployment benefits in the US or elsewhere. Such a strategy only serves to further undermine the spending capacity of the private sector at a time when the principal problem is a deficiency of aggregate spending. A simple understanding of macroeconomics leads to the conclusion that our pathological meanness to the unemployed is just bad economics.

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