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Why Unemployment Checks DO NOT Create Jobs (and Why Pelosi is an Idiot!)

Clueless in DC

Clueless in DC

If you missed the press conference where Nancy Pelosi made the ridiculous claim that unemployment checks are an economic stimulus and they create jobs, it is embedded below for your review.

The fatal flaw in Pelosi’s reasoning is the incorrect belief that unemployment checks stimulate. While she is correct that the money is quickly spent, which is the basic and necessary requirement of any government effort to stimulate the economy with free money, she also states the money “is needed for families to survive, and it is spent”. That much is true, however, a stimulus must be over and above the minimum spending required for survival. Otherwise it is merely basic sustenance, not stimulus.

A stimulus, by definition, creates spending above the baseline. An economy in decline, as we now have, requires stimulation over and above the baseline.

Any family surviving on unemployment is spending less than when employed. There is no discretionary spending, only basic survival. There are no visits to restaurants, no home beautification projects to keep jobs at Home Depot, no extras. Period.

Unemployment Insurance is Insurance

Unemployment insurance is insurance. The purpose of insurance is to indemnify, or make whole. The objective of any type of insurance is never to leave you “better off”, but to leave you the same. Unemployment Insurance fails miserably at indemnification. It will not even come close to replacing your income, let alone benefits. You will always be far worse off. (And this is a prime example of why government “single payer” health care is a BAD idea.)

If your auto insurance company decided to replace your brand new BMW, which you totaled, with a 1995 BMW, you are not indemnified. You are screwed.

But this is exactly how government provided unemployment insurance works. Except in most cases the BMW is replaced with an old bicycle.

The net effect of unemployment spending when compared to “employed” spending is a vast decrease in money flowing out.

What we see with so many people trying to make ends meet on unemployment is a sharp upswing in foreclosures, more people living without insurance (of any kind), and businesses are seeing a drop in sales.

No one is actually seeing a recovery where it counts – in their pocketbooks.

A Stimulus May No Longer Work

Unfortunately, the country may be beyond the point of no return where a stimulus would actually be successful. Should the government decide to put a sum of money into the hands of citizens, the unemployed will use it for basic living expenses, and to catch up on overdue bills. Those with jobs are more likely to hold onto the money in case they find themselves unemployed.

The loss of jobs the country is suffering at the hands of Democrats that just don’t get it is not a good thing. There is neither stimulation nor jobs creation in unemployment. There is only misery.

And while everyone can see through Pelosi’s scheme to continue throwing money into unemployment “off budget”, the fact is, the National Debt will only lead to more jobs lost. The Republican’s instance that Democrats stick to a budget (which Democrats refuse to even create) will actually lead to more jobs in the long run.

This statement by Nancy Pelosi is proof positive that the Democratic leadership is incapable of leading the country out of this mess. They are unable to determine which way is up.

About Tom White

Tom is a US Navy Veteran, owns an Insurance Agency and is currently an IT Manager for a Virginia Distributor. He has been published in American Thinker, currently writes for the Richmond Examiner as well as Virginia Right! Blog.

Tom lives in Hanover County, Va and is involved in politics at every level and is a Recovering Republican who has finally had enough of the War on Conservatives in progress with the Leadership of the GOP on a National Level.

4 Responses to “Why Unemployment Checks DO NOT Create Jobs (and Why Pelosi is an Idiot!)”

  1. Ken says:

    Dear God – Can I have Bill and Hillary back. Hillary President and VP Bill? Is that possible?

    I digress. It’s complete lunacy to think that unemployment payments create or stimulate jobs. Perhaps they do if the economy and GDP is really low. However, if you think that is true then how much do you think the economy would be stimulated if these people HAD JOBS! Unemployment is a mere fraction of what higher income earners generate. So get the higher income people jobs and really stimulate the economy.

    Californians I left a once great state and am happy. You reap what you sow with Pelosi. You keep voting people in that have no clue about anything but spending, spending spending and taxing. It’s time to pay your piper

  2. Phil Cooper says:

    Who’s the bigger idiot? Is it Nancy Pelosi or her welfare-sucking constituents who keep reelecting her had sending her back to Washington, D.C.?

  3. Tom White says:

    You know. It’s a shame Biden and Pelosi are already married. They would make such a great couple. They both think alike – not at all!

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  1. […] takes a special kind of person to vote with a Speaker that believes unemployment is the fastest way to create jobs. Talk about shucking and […]


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Tom White Says:

Nothing is more conservative than a republican wanting to get their majority back. And nothing is more liberal than a republican WITH a majority.

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