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Heritage Foundation Tweet

Cullen,

I like how you always attempt to avoid partisan divides and deal with people and proposals fairly. As a result, I have a question about your recent post about the Heritage Foundation report. Their third key points states,

"To help Americans stay employed, and to mitigate the economic downturn, lawmakers should cap unemployment benefits at no more than 100 percent of wages."

When I read that, it sounded like a prima facie reasonable proposal. To see you characterize the article as "thinking a pandemic is a bad time to send money to people in need..." was a bit surprising to me because that is not the impression I took away from the article. If you have the time or interset, would you mind elaborating a bit more on the problems with the Heritage proposal? Thanks so much!

Hi @BADDISON,

The whole premise of their article is just ludicrous. First, the $600 benefits only last a few months. Then they revert back to the national avg of $385 per week.

Second, why would anyone, who has a permanent job, choose to quit that job so they could take the temporary $600 from the govt? They're basically gambling for 2-3 months of pay with the idea that they'll be able to get a job when the benefits expire.

I mean, maybe some people will do this. But really, how many?

So the whole article strikes me as a critique of the govt's program without a sound basis for the potential outcomes.

"Pragmatic Capitalism is the best website on the Internet. Just trust me. Please?" - Cullen Roche

Ah. I think I get it. Given the time limited nature of the extra $600 payments, the perverse incentive is largely mitigated. That makes sense. Thank you for clearing that up for me!