Supporters of extending the unemployment benefit unconvincingly argue that the extended benefit will stimulate the economy and thereby create jobs.  This macroeconomic benefit would be more convincing if unemployment benefits were not a zero-sum transfer of money from the productive sectors of the economy. Realistically, these payments come from taxes on the employed who must reduce their consumption to pay the taxes; or from investors who finance the increasing federal deficit rather than financing productive companies that create jobs.

The best way to create jobs and reduce employment is to create an environment where business has confidence in the future economic outlook.

Unfortunately, most of the programs the federal government has tried over the past 18 months have not created business confidence.  Job credits which subsidize the hiring of the unemployed who would have been hired anyway do not create confidence. Cash for operable clunkers that are replaced by subsidized cars do not create confidence.  Additional unspecified federal regulation of Wall Street may sound good on Main Street, but it does not stimulate bankers to lend to or invest in American businesses. The $867 billion stimulus package allocated more to plugging state government deficits than proving opportunities to private business. Shutting down Gulf coast offshore drilling for six months may play well with the environments, but it does not help the hundreds of thousands of employees who lose their jobs as a result.