Think Progress scoffs at Rep. Shadegg’s scoffing at the idea that unemployment benefits “are a benefit to the economy.”

Read it here. The blogger’s name is Paul Garofalo.

I haven’t dug entirely into what Rep. Shadegg said or what his whole meaning might have been. I’ll forgo trusting in Think Progress’ interpretation, thanks. Let’s talk economic concepts instead.

Concepts which, it must be said, seem to be well outside Garofalo’s understanding.

Garofalo writes:

…unemployment benefits are the single best way to pump money into the economy and generate economic activity, as the unemployed are very likely to spend all of the benefits they receive (thus moving money into local businesses).

That statement would be true if, and only if, the money doesn’t exist outside of those unemployment benefits. If the unemployment benefits themselves created the wealth that is spent by unemployment recipients, then he’s right: there is no better way to “pump money into the economy.”

But that wealth already existed in the economy, and was therefore going to be used in the economy. Whether it was spent in a retail store, invested in pork futures, or placed securely in a savings account, the end result is the same: somebody, somewhere, gets that money in his pocket, and then puts it somewhere else, from where it ends up in somebody else’s pocket.

And so on, and so on, and so on.

By taking that money through unemployment taxes, filtering it through the bureaucracy, and then putting it into an unemployed person’s pocket, the money does still get spent in the economy. The question is: was this better for the economy than the alternative? Is the opportunity cost of filtering that money through the unemployment system a net economic gain?

The answer: of course not. That money isn’t producing anything, thus it’s a net loss on the economy as a whole.

This isn’t to say we shouldn’t have unemployment benefits. It is simply to point out: Garofalo is either economically ignorant, or he’s simply taking a populist partisan shot.

Via Memeorandum.