[QUOTE=Evil Captor]
This is pretty much what I was driving at in my comment about the fundamental flaw in capitalism. Also, most economists admit that any free market system will periodically have “corrections” that will increase unemployment. These are flaws in the system as far as human beings go, that we should take into account and ensure that the mere human beings who are involved in the Mighty Free Market system won’t be hurt too badly.
Thanks, Kimstu, for spelling it out much better than I did.
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Why do you assume that a small unemployment rate is necessarily a bad thing? Just the fact that it takes time to transition between jobs means that any given snapshot in time will show a certain percentage of the population as unemployed. Why it should suddenly be the government’s job to foot the bill for them during the transition is beyond me.
If there are people who cannot work due to mental or physical disabilities, let’s help them lead a nice, comfortable life. I have no problem with that. I also have no problem with state-sponsored catastrophic health insurance, or any other program designed to help the truly desperate.
But the minute you start expanding such programs to cover not just the people who absolutely need the help, but people who are simply being made uncomfortable due to temporary circumstances, you cross a big line. For one thing, programs like this create a moral hazard - they reward destructive and non-productive behaviour. They create dependencies. Left in place long enough, the entire economy shifts around them so they become extremely difficult to remove. Someone mentioned reservations before - a perfect example of a moral hazard. Life on the reservation is hard, but it’s not impossible. We subsidize it just enough to have created whole populations of people utterly dependent on government support to survive. And absent the need to adapt and learn new skills, they have chosen to simply live poor but subsidized lives. We’re doing them no favors.
You see the results of heavy employment subsidies in Atlantic Canada, where the population is heavily subsidized. The economy has adapted to that subsidy, and it has locked people into an unsustainable way of life that depends on government handouts to maintain. And they aren’t particularly happy, either.
Another example of a moral hazard is the destruction of the extended family that was a consequence of social security. Families typically didn’t just break apart and get together a couple of times a year like they do now - they tended to stay together because they were the social welfare and retirement programs. When you got old, your family looked after you. If you were in financial difficulty or between jobs, the family helped out. Government social programs reduced this need and contributed to the decline of the large, extended family as a social unit. To our detriment. And people don’t even save for themselves.
Talk to people from my grandfather’s generation, and they’ll tell you that saving was a way of life. You had to have savings, because you needed them in case of emergencies, job loss, illness, and retirement. Now if you get sick, we want the state to pay the bills. If you lose your job, we want unemployment support. When we retire, the state will give us the money to live on. In helping some people who truly need it, we’ve wound up replacing family and community with a faceless bureaucracy.