Hi, I'm from the government

NY Times hosted blog, so you can feel free to read on if you are pre disposed to trust that "media" site and distrust the WSJ or AEA. The summary of economic research is both provocative and might inform the calculation of costs and benefits in the short and long term of government interventions.

I fear, as I have blogged previously, that belief will trump any reasoned review of either the incentives or consequences of extensions of unemployment benefits. Odd to consider providing a benefit to unemployment.

Claims that extensions of unemployment are critical for the recovery of the economy smack of the triumph of faith and hope over reason and history. Moreover, the empirical confusion over the impact of 1 dollar spent on benefitting umemployment (this could be tax money or borrowing coerced from those who are working) on future economic performance - creates 1.60 dollars, creates 2.25 dollars, creates .55 dollars, destroys .45 . . . well this confusion or lack of consensus is no reason to not act.

Yet, belief trumps analysis.

As the elected representatives negotiate in Washington - extensions of unemployment in return for temporary extension of the tax cuts, I can't help but think of Bob Higgs and Kurt Vonnegut. Higgs convincingly presents the case for the negative consequences of regime uncertaintly - and the US has plenty of this right now. Vonnegut excelled at demonstrating the absurdity of central planning and that black comedy anticipates what we will be reading about over the next 5 weeks. In fact, the 2012 campaign season seems to have exploded in earnest - and actions to deal with debt and deficit are swept aside, as the media demands that we direct our attention to the unemployed. And any attention toward tax policy is filtered through a lense of rent seeking rather than legitimacy - with my apologies to Simpson and Bowles.