the whitestick papers

looking at politics from a different perspective

Bunning: patriot or pariah?

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There’s been quite a bit of chatter lately about Senator Jim Bunning (R-KY) and his insistence that the source of the $10 million needed  to extend unemployment benefits before the Senate approves that extension.   Bearing in mind he couldn’t do this on his own as it requires 40 other Senators to allow a filibuster, the fact remains that he’s the most outspoken of the group and definitely the target of the media and those who think the extension should be granted immediately.

Before we go any further and in the interests of full disclosure, I need to let you know I have a dog in this fight.  I’m a casualty of the economic slowdown, a little more than a week away from my one year anniversary as an unemployment statistic.  I’m close to having this issue affect me and my family, already struggling to make ends meet.  But there’s a bigger picture here, and I think we all need to look at the issue from the perspective of principle rather than personal want.  As I see it, there are two parts to this, one philosophical and the other economic.

The philosophical question involves the role of government.  Bunning has staked his concern on where will the money come from.  While that’s a very good question when we’re looking at skyrocketing deficits and government spending that simply can’t keep growing at the rate it’s been growing, there’s the question of what responsibility does government have to its unemployed.   Is it the role of government, at any level, to act as an insurance provider, forcing the payment of “premiums” while someone is working so that person has something to fall back on if they’re unemployed.  Looking at the US Constitution, my conclusion is there’s nothing supporting this.  So, in that sense, Bunning has it right.

Add to the Constitutional issue the question of whether the Senate should obey the rules it sets for itself.  Recently, they made it so any spending must be paid for as it goes.  In reality, all Sen. Bunning g(and those supporting his filibuster) are doing is requiring the Senate live by the rules.  When you strip out the emotional element, that seems fair.

On the economic side, I wonder why this extension is even necessary.  Unemployment is reportedly at about 10%.  That should mean for every person receiving unemployment benefits there are nine people paying into the system, plus the matching amount paid in by their employer.  Okay, so there’s a lot of people out there who aren’t working but also not collecting unemployment, but even the worst estimates put that at 20% total unemployment.  That still means an eight-to-one ratio of money going in to money going out.  But a number of states have run out of funds to pay benefits and need this bailout to stay afloat.  And what about the “trust fund” us job-seekers were paying into for years?   What happened to all that money?

Actually, this is a rhetorical question.  Like Social Security, unemployment insurance is a Ponzi scheme, where those who came in early get paid by the money put in by those who came later, there never was any trust fund or lock box protecting their “contributions”.  As long as there are more people paying in than are taking it out, it works.  But as soon as more money goes out than is coming in, the pyramid collapses.  And that’s exactly what has happened.

Most states have treated unemployment insurance as an extra tax; there’s always been a lot more coming in than has been going out, so it was a great cash cow.  There never was  any investment of the “premiums”, as would have been the case with a private insurance company; they spent the money on various programs and the bureaucracies needed to make them work.  Because the well was, for the most part, dry when the number of unemployed got to a certain point, they’ve gotten into the habit of getting bailed out by the federal government.  And, until now, the federal government went along with the illusion.

Yes, my family and I will probably suffer unless I beat the odds and get a new job before my benefits run out.  But weaning America off the various easy solutions that have gradually enslaved us is going to hurt people – probably, in one way or another, most if not all of us.  During the American Revolution, Thomas Paine didn’t have a lot of patience for what he called the “sunshine soldier” – someone willing to fight for liberty until the way got hard for him.  I won’t be one of those.

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Written by Jeffrey S. Smith

4 March 2010 at 11:02 am

Posted in Events

Tagged with ,

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