Wednesday, September 1, 2010

Never Enough: William Voegeli on America's Limitless Welfare State

"The denial of the possibility that there is an endpoint [to the welfare state] is crucial to the liberal enterprise," says Dr. William Voegeli, author of the new book, Never Enough: America's Limitless Welfare State and a visiting scholar at Claremont McKenna College's Henry Salvatori Center for the Study of Individual Freedom in the Modern World.

In this interview, Voegeli traces recent federal government expansions to President Franklin Roosevelt's introduction of a "second Bill of Rights" that included the right to housing, education, and medical care.


Grouch: I've always believed that if you subsidize something you get more of it, whether you're talking unemployment benefits or welfare. Whether Clinton mean it or not when he said "Welfare should be a hand up, not a way of life," he was certainly on the right track. However, does extended unemployment benefits to 99 weeks encourage more unemployment?

Robert Barro, in an article entitled "The Folly of Subsidizing Unemployment" in Monday's WSJ, seems to think so.  His "calculations suggest the jobless rate could be as low as 6.8%, instead of 9.5%, if jobless benefits hadn't been extended to 99 weeks." He goes on to state:
... it is reasonable during a recession to adopt a more generous unemployment-insurance program. In the past, this change entailed extensions to perhaps 39 weeks of eligibility from 26 weeks, though sometimes a bit more and typically conditioned on the employment situation in a person's state of residence. However, we have never experienced anything close to the blanket extension of eligibility to nearly two years. We have shifted toward a welfare program that resembles those in many Western European countries.

The administration has argued that the more generous unemployment-insurance program could not have had much impact on the unemployment rate because the recession is so severe that jobs are unavailable for many people. This perspective is odd on its face because, even at the worst of the downturn, the U.S. labor market featured a tremendous amount of turnover in the form of large numbers of persons hired and separated every month.

For example, the Bureau of Labor Statistics reports that, near the worst of the recession in March 2009, 3.9 million people were hired and 4.7 million were separated from jobs. This net loss of 800,000 jobs in one month indicates a very weak economy—but nevertheless one in which 3.9 million people were hired. A program that reduced incentives for people to search for and accept jobs could surely matter a lot here.

I wouldn't argue that unemployment benefits are a living wage, but are they enough to keep people from pursuing job opportunities as energetic as they might with no check coming in? What do you think?

HT: Calafia Beach Pundit


  1. I am torn regarding extending unemployment. I know some people that are really struggling with finding work, and are truly looking for work. I know others that say "I am going to take a break and draw unemployment since I paid into it in the first place". I know others still that say "I make as much with unemployment than I would at jobs I can get now, so I will keep taking unemployment".

    I think the unemployment system is just plain flawed. It is way too easy to collect unemployment. All you have to do is click a couple of buttons and your check will be instantly deposited. If only people were held accountable to prove they were actually looking for a job to collect, it may get people out searching more too. I am sure that would take more resources though, and the government has no money. Maybe they should get the white collar criminals to work in the unemployment offices and do the extra work to make people prove how hard they are working to find a job.

    I guess I am a grouch too!

  2. Well, you know, the name Grouch is just a joke; I'm really a very happy, though slightly cynical, fellow, very little grouchy about the man behind the Groucho mask.

    The top half of this post makes an important point about positive rights as opposed to negative rights, as our founders intended. Negative rights mean a small, limited federal government; positive rights mean a limitless federal government with boundaries around what it can do to the people, and no end to needs of the people that it will try to fulfill with someone else's money. As Ben Franklin said: “When the people find that they can vote themselves money,that will herald the end of the republic.”

    As for unemployment, I'm unemployed at the moment, but not collecting unemployment benefits. I might file for them if I can't find something in the next couple of months. I do think 99 weeks is a bit much, and can be a disincentive.

  3. I know people personally who have turned down work to collect unemployment. Its a system that encourages people to not be ambitious. But how do we balance that with the truly needy people that are helpless without it. There always will be those who game the system.

    Keep up the good work on the blogging. I find them thoughtful and interesting.

    I knew you weren't really a grouch