Re-hire and Fire

I'm again on the fence regarding the re-re-re-re-re-extension of unemployment benefits. On one hand I think of how many people are staring into the abyss, but on the other, the extensions are simply augmenting familial unit income that will never be replaced.

Case in point: my co-worker's wife, who after delivering her latest baby has no intention on returning to the workforce. Indeed, once her benefits expire, she'll no longer be included in the participation rate, and as such will no longer be included in the unemployment rate. I find this notion intriguing; the day her benefits stop, the unemployment rate will also drop by one person. If there are 100 working people and 20 of them are unemployed and pulling benefits, the unemployment rate is 20%. If benefits expire for 5 of them yet they don't look for work as they weren't planning to, then the rate magically drops to 15%. Nothing has changed...but the rate is reduced.

Accounting like this is why the U3 rate, the official rate, is a rather useless indicator in my mind. It's also why mark-to-fantasy accounting is the preferred method of asset valuation at all the major banks...because it's bullshit, but it makes them appear more solvent than they would be otherwise.

My co-worker's wife -- she'll obviously draw on this for as long as humanly possible, as any of us would. The argument is that "we've already paid into it, so we feel we have the right to a return of those payments." Fair enough. But then I hear of an interesting way to keep her benefits extended:

She will "seek" employment on a ranch that her relatives own. She'll pay the rancher $3,000 to "hire" her, where she'll "work" for three months on the ranch's payroll which gets returned to the rancher. The rancher pays unemployment insurance premiums, and when he "lays her off" after those three months she skips on down to the unemployment office to file for unemployment benefits while the rancher doesn't contest it. The rancher doesn't lose anything; indeed, is able to write off her wages while the initial $3,000 covers those ancillary costs of social security wages, etc. and leaves some for himself for his efforts. She'll get a return on that $3,000 within just a few months while the benefits continue to get re-re-re-re-re-re-re-re-re-extended by the already broke government. Obviously this won't provide for nearly the same level of benefits, but it's something. Gas money. A few dinners out. New sneakers for the kids. What have you.

I'm pretty sure I don't have the facts straight on this type of abuse, but I can be assured that many people have long ago figured out how to extract every possible dime from such government programs. It is for these people that I wouldn't mind seeing 99 weeks as the ceiling for these checks.