Toddsterpatriot
Diamond Member
It had a measurable effect on gdp at the macro level. And, you are incorrect in thinking that money was taken out of the economy. Employers were not taxed for it. Everyone pays for it after the fact from any usual and customary inflation.It has no multiplier.
unemployment is funded by taxes charged by the state and federal governments each business pays based on its payroll and on the number of claims filed for each business.
That money is taken out of the economy and held by the government.
When that money is paid in UE benefits it is LESS than what the person was making while employed and is not magically multiplied.
So in reality that money is taken out of the economy and held where it can offer no benefit to the economy then if it is paid out not all of it is put back into the economy so it's actually a net loss of economic opportunity
It had a measurable effect on gdp at the macro level
Yes, the effect is reduced GDP.