Two cheers for the payroll tax cut extension

Not so much for the extension itself.  The economic evidence on this front is overwhelming: temporary tax cuts provide little to no stimulus.  Also by extending the ability of workers to collect unemployment benefits for more than one year, Congress is locking in additional unemployment.

But we all knew the tax cut and benefit extensions were going to happen anyway in an election year.  To partially "fund" these goodies, Congress took two positive steps:

1) Changes to the Unemployment Insurance: WSJ reports that workers on involuntary part-time schedules now will be allowed to collect some benefits, which may encourage employers to keep workers on the payroll part-time (as opposed to layoffs).  Also programs such as Georgia Works, where the unemployed can collect benefits while going through training programs, also will expand.  Finally, the self-employed will now be covered by UI; not sure how this is going to work.

2) Spectrum auction: To fund the extra UI benefits, Congress agreed to auction off spectrum currently held by television stations to expand wireless networks.  NYT reports the auction is expected to raise $25 billion and will help us all play more games and watch more streaming videos on all our iDevices.  Some of the spectrum also will go to first responders.