Aside from the "tax cut" that wasn't a tax cut, just a lowering of withholding rates meaning everyone would end up owing the same taxes at the end of the year, Pelosi states that paying unemployment would create jobs.
This completely ignores the concept of Time Value of Money and how jobs are created.
First, the money is removed from the economy as taxes and returned at a discount without interest being charged. That means the process starts off as a net loss of income.
Next, those receiving this money are not expected to repay it. Worse, we don't know how those receiving it will actually spend it either. The worst possibility is they convert their government money, like Food Stamps, into cash on a black market at a heavy discount.
But, even if those receiving it acted completely 100% altruistically and used it for basic goods to live on this does little or nothing to drive the economy forward. The amounts individually spent are too small and the spending too diluted within the whole economy to be an economic driver.
So, investment capital is removed from higher end tax payers and put into treading water for the unemployed. Even if Pelosi were 100% right, that 600,000 jobs were created by unemployment spending the obvious counter is that if that same money were invested in the economy instead of doled out to individuals in tiny amounts, may as many a 1.2 million jobs would be created reducing the need for unemployment payments and further driving the economy forward.
So long as government isn't operating on the profit motive it is unprofitable and remains stuck on the aforementioned pre Time Value of Money model that held down economies for centuries.
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