Saturday, December 27, 2014

Generous Welfare, Not Austerity, Creates Jobs

This is actually not counter-intuitive, at least to those of us who understand how difficult it is to find a job when you're drowning in student debt, you can't make the rent or afford food for your kids.

Starving families = starving economy. 

From the New York Times:

It is a simple idea supported by both economic theory and most people’s intuition: If welfare benefits are generous and taxes high, fewer people will work. Why bother being industrious, after all, if you can get a check from the government for sitting around — and if your choice to work means that much of your income will end up in the tax collectors’ coffers?

Here’s the rub, though: The idea may be backward.

Some of the highest employment rates in the advanced world are in places with the highest taxes and most generous welfare systems, namely Scandinavian countries. The United States and many other nations with relatively low taxes and a smaller social safety net actually have substantially lower rates of employment.

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