I don't even think it's about keeping idiots out of the economy. I think that there are a lot of harmful incentives like retirement that keep people doing things they don't like, and then they do poorly at them... they aren't idiots because if they were they would just retire. They have an incentive to stick with a dysfunctional position because there isn't an alternative.
In any event, Japan, in the 80s, was pretty much near full-employment. I don't think many economists or government officials would argue that was "bad". Perhaps industrialists who could not find labor might have thought it was "bad".
They may not be paid to stay home, but they are paid to stay the hell out of the way of anything that could affect the smooth running of the business.
>"I divide my officers into four groups. There are clever, diligent, stupid, and lazy officers. Usually two characteristics are combined. Some are clever and diligent -- their place is the General Staff. The next lot are stupid and lazy -- they make up 90 percent of every army and are suited to routine duties. Anyone who is both clever and lazy is qualified for the highest leadership duties, because he possesses the intellectual clarity and the composure necessary for difficult decisions. One must beware of anyone who is stupid and diligent -- he must not be entrusted with any responsibility because he will always cause only mischief."
Keeping diligent idiots out of the economy by paying them to stay at home would be far more economically beneficial than a drive to bring about full employment.