Why Is It...

That the State has this penchant for making economic problems worse?


So what does Washington do? In an act of incredible stupidity, Congress has passed an extension of unemployment benefits. The old rule remains true: if you subsidize something, you get more of it. So this will give us more unemployment. No question about that. It will thereby worsen and prolong the problem.
It takes only a second of economic logic to see why. In a recessionary environment, we need freer, not more socialized, labor markets. Business needs to be able to hire workers at lower prices. You don’t want to increase the cost of hiring; you want to reduce it, especially with unemployment rising. Instead, Congress loots the workers of this country in order to prevent people from entering the job market.
This is not only stupid; it is highly dangerous. Britain tried this in the 1930s, and more than any other action, this contributed to the high unemployment rates that fueled socialist political movements, which led to the destruction of that economy. It could do the same here in the United States.



The economy works best when it is left alone.