It’s Krugman vs. Krugman on generous unemployment insurance!

Krugman now: Paring back on generous unemployment benefits is cruel … and meanspirited!

In general, modern conservatives believe that our national character is being sapped by social programs that, in the memorable words of Paul Ryan, the chairman of the House Budget Committee, “turn the safety net into a hammock that lulls able-bodied people to lives of dependency and complacency.” More specifically, they believe that unemployment insurance encourages jobless workers to stay unemployed, rather than taking available jobs.

Krugman then: Generous unemployment benefits encourage jobless workers to stay unemployed, rather than taking available jobs

Public policy designed to help workers who lose their jobs can lead to structural unemployment as an unintended side effect. Most economically advanced countries provide benefits to laid-off workers as a way to tide them over until they find a new jobs. In the United States, these benefits typically replace only a small fraction of a worker’s income and expire after 26 weeks. In other countries, particularly in Europe, benefits are more generous and last longer. The drawback to this generosity is that it reduces a worker’s incentive to quickly find a new job. Generous unemployment benefits in some European countries are widely believed to be one of the main causes of ‘Eurosclerosis,’ the persistent high unemployment that affects a number of European countries.

The quotation is from page 210 from Macroeconomics, by Krugman and Robin Wells.

It’s for just such total reversals as this (and they are legion) that Krugman thinks quoting his past pronouncements amounts to a personal attack. Michael D. Tanner of Cato cruelly quoted this passage back in 2010 in Cato Commentary and Politico.

Jon Sanders / Director of Regulatory Studies

Jon Sanders studies regulatory policy, a veritable kudzu of invasive government and unintended consequences. As director of regulatory studies at the John Locke Foundation, Jo...

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