According to liberal flip-flopper and economist Paul Krugman it does. Or did. Or maybe it depends on who's in power. Public policy designed to help workers who lose their jobs can lead to structural unemployment as an unintended side effect. Most economically advanced countries provide benefits to laid-off workers as a way to tide them over until they find a new job. In the United States, these benefits typically replace only a small fraction of a worker's income and expire after 26 weeks. In other countries, particularly in Europe, benefits are more generous and last longer. The drawback to this generosity is that it reduces a worker's incentive to quickly find a new job. Generous unemployment benefits in some European countries are widely believed to be one of the main causes of "Eurosclerosis," the persistent high unemployment that afflicts a number of European economies. -From Macroeconomics By Paul Krugman & Robin Wells Second Edition edition (February 28, 2009)
your graph is completely out of context. Bush took over a economy which was cratering after the internet bubble burst. A Bubble partially caused by wall street coruption and lack of oversite by Janet Reno. Bush tax cuts brought us out of the economic pullback which started under Clinton... rather quickly.