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As 1.3 Million Americans Are About To Lose Their Jobless Benefits This Week, The Unemployment Rate Will Surge To 10.5%
As we reported on Friday, a critical bill that was unable to pass this past week was the extension of unemployment benefits to millions of Americans currently collecting a $1,200 average monthly stipend from the US government for sitting on their couch and not paying their mortgage. As a result of this huge hit to endless governmental spending of future unearned money, the WSJ reports that "a total of 1.3 million unemployed Americans will have lost their assistance by the end of this week." Furthermore, the cumulative number of people whose extended benefits are set to run out absent this extension, will reach 2 million in two weeks, and continue rising: as a reminder the DOL reported over 5.2 million Americans currently on Extended Benefits and EUC (Tier 1-4). The net result is yet another hit to the US ledger, as soon 2 million Americans will no longer recycle $1,200 per month into the economy. In other words, beginning in July, there will be $2.4 billion less spent each month by America's jobless on such necessities as LCD TVs (that critical 4th one for the shoe closet), iPads and cool looking iPhones that have cool gizmos but refuse to hold a conversation the second the phone is touched the "wrong" way. As the number of jobless whose benefits expire grows, the full impact of lost money will progressively increase, and absent some last minute compromise, the monthly loss will promptly hit $5 billion per month. Annualized this is a hit of $60 billion to "consumption", and represents roughly 120 million iPads not purchased, and about half a percentage point of GDP (ignoring various downstream multiplier effects). Worst of all, as these people surge back into the labor force, the unemployment rate is about to spike by nearly 1%, up to 10.5%.
From the WSJ:
On Thursday, Senate Democrats failed to secure the 60 votes needed to break off a GOP-led filibuster. Sen. Ben Nelson (D., Neb.) voted with Republicans in a 57-41 roll call. Senate Majority Leader Harry Reid (D., Nev.) said this third vote on the matter would be the last, allowing the Senate to move on to modest legislation cutting taxes for small businesses.
The collapse of the wide-ranging legislation means that a total of 1.3 million unemployed Americans will have lost their assistance by the end of this week. It will also leave a number of states with large budget holes they had expected to fill with federal cash to help with Medicaid costs.
Up in the air are other provisions that were to be included in the legislation, including some $50 billion in new taxes designed to help offset its cost. They included an increase in levies paid by private investment groups, including hedge-fund firms and real-estate partnerships, a provision long sought by some Democrats that will likely return another day.
Under a program initially enacted last year—which expired June 2—jobless workers could receive up to 99 weeks of aid, including 26 weeks of basic assistance provided by states plus longer-term federal payments. The Labor Department estimates that the long-term unemployed, meaning those out of a job for at least six months, make up 46% of all jobless workers in the U.S.
And like every other stimulus program, there are those who focus on possible cons from the program end...
There are economic risks in ending benefits. Workers receiving them tend to funnel money back into the economy immediately, helping prop up demand and jobs.
In addition, said Harvard economist Lawrence Katz, if workers are unable to find work and no longer eligible for unemployment benefits, some will turn to other government programs, such as disability and Social Security. "If you're really concerned about the long-term deficit, you should be really concerned about the long-term unemployed," Mr. Katz said.
and pros...
Other economists argue that extended benefits have played a part in keeping people out of the labor force. "There's a very large body of research that says that more generous benefits and benefits that last longer…encourage people to stay out of work longer," said Bruce Meyer, an economist and public policy professor at the University of Chicago.
James Sherk, a labor economics analyst at the conservative Heritage Foundation think tank, said that while it could be argued that the benefits made available last year were too extensive, cutting off workers who expected to receive the full 99 weeks of benefits isn't ideal either. "You don't sort of pull the rug out from someone halfway through," he said.
In our view, what will happen is that the 1.3 million who had gotten used to receiving benefits (and for whom we certainly feel sorry, as once again expectations and reality under the current administration diverge in a dramatic fashion) and had no desire to look for work, will immediately flood back into the labor force to find some job, any job, that pays even remotely as well as what the government did. What this means is that the total labor force (which incidentally dropped by 322,000 From April to May) of 154.393 million, is about to grow by at least 1.3 million, and as much as 2 million, in July. And since census employment peaked, and the number of employed will stay flat (at best) at 139.420 million, the expansion in the total labor force, will increase the unemployment rate by almost 1% in just a month, growing from 9.7% in May to 10.5% in July. That number will be reported in late August. But by then the sequel to the Great Depression v2 movie will be playing in every theater across the land, and this number will be the least of our worries.
Appendix A: average monthly benefits check as per the Daily Treasury Statement and the DOL's weekly claims report.
Appendix B: For an extended discussion of jobless benefits, how they work, and how their expiration will adversely impact the economy, read As Extended And Emergency Unemployment Benefits Finally Begin Expiring, A Much Different Employment Picture Emerges
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Come to Crook County and I'll show you.
When your rent and utilities are subsidized, your health insurance is paid for, you get $500/month to spend on food (if you can), you get free bus & train rides, a CELL PHONE from the gov't, and then on top of that they cut you a check, sure your income makes you "poor" but what expenses do you really have?
I'm a couple years out of a top-10 University, working 12+ hour days and feeling guity every time I hit up the dollar menu because I'm socking away every penny for the triple dip, and there are people living around me with much more extravagant lifestyles who I'm certain aren't working 1/3 as hard (if at all).
My income is firmly lower middle class, and I still live quite comfortably. "Working poor" is a joke--if you're working, you're not poor unless you're funding a ridiculous lifestyle. Even if you're not working, people like me are buying you everything. I say end the multi-YEAR unemployment checks and stop incentivizing people to make a career out of waiting for checks (or ignoring jobs they think are beneath them).
One of my old friends is/was riding the gravy train. Purposely got fired so he could play more video games, and never even bothered looking for a job. When you have no ambition + free money + roommates, you start seeing people who are happy to sit at home in their underwear playing WoW.
turn him in as a welfare cheat... call up the authorities and turn 'em in. Then find out where some illegals live and turn them in too. Turn everyone in...
How about extending the same force to business? They'll wait out for political expediency and cheapness as much as the unemployed will.
Force them to extend direct, full-time, long-term to lower qualifications for the same dollar amount as originally stated.
Speaking as one of these discouraged workers, I can tell you my bit.
I am part of an adult family of 4. One of us has an excellent job with the Wintel monster. He keeps us fed and warm. Our 2000-2002 cars are reliable and totally paid for. We have a below 5% 15 year mortgage on a house that we got in 2003 before local prices went nuts. We don't have a lot of expensive habits or hobbies so we can live fairly cheap. We don't believe in doctors except for trauma care, which frees up a lot of capital.
I have some unusual technical skills that allow me to make an occasional large amount of cash. Since we don't need this money to survive, we invest it in 'hold it in your hand' PMs.
We don't have unemployment money coming in, and 3 of 4 of us are terminally unemployable. Or discouraged workers, as they say. This means that 75% of us have no job. But officially, there's only one employable person in the house. So really, we have a 0% unemployment rate and three discouraged workers who don't actually count.
Kind of makes me proud!
But we take care of each other very well, so it works. Or at least it has for 25 years. This is not to say we've had this particular arrangement for 25 years. But it has gradually gotten to 3 of us at home, 1 of us on the job. In the good old days under Reagan and Clinton it was 3 of us working at any given time, but stuff happens.
When our major moneymaker was out of work for awhile, it was getting very tense around here. But that was a few years ago, before we had a nest egg. Now, we have a buffer for the next national economic disaster.
So now, those 3 of us without regular gigs do other things which don't increase the wealth of the nation or the household, but we do entertain/inform and/or amuse many other people. So we're not just sucking up valuable groceries and oxygen, we give back emotional fertilizer. And we're keeping the bills paid, which is what America is all about.
On the other side of the coin, some of these discouraged workers not in our family are sitting next to your local fast food place or freeway ramp with a sign that tells a terse but sad story. usually ending with "Thanks - God bless."
While I feel their pain, I don't think bumming money off from strangers is a valid lifestyle. So unless they entertain me, I don't feed their kitty.
And a LOT more discouraged workers are rarely seen. They live in that thicket near the freeway. Those bushes behind the bottling plant. Or just in an alley somewhere. They are truly homeless as well as discouraged. Most of them used to be way too much like you and me. But something blew up their life, and now they're truly, irreparably screwed.
Yeah, we should all be proud of a nation that forces people to live like that. Woops, sorry, that's their choice of course. And who WOULDN'T live like that, given a CHOICE? Fabulous!
It's a lot easier to say "I'd never live like that" than it is to actually HAVE TO live like that and not be given the choice. I was on the edge of that in my younger days more than once. It's a scene that's too scary for me to look at without somebody to pat my head and tell me it'll be okay.
... all those people are drug addicts who refuse to get jobs. They live that way because of "choices".
And we're keeping the bills paid, which is what America is all about.
(boy - you got that right... and man - what bills they are!)
You are talking complete bullshit now. Everyone, but everyone including yourself, has the right to say no to jobs that are only a step away from slavery: Ridiculous working hours with basic wage. This is resistance if you cannot understand it. This is one of the things you can do to say f.ck off to a system based on exploiting you.
Let me know if you happen to get fired soon. And I will offer you a job of cleaning my house for 4pounds an hour in the U.K. If you don't accept it, I will announce on ZH that you are a drug-addict who choose not to work.
Have you ever heard of the term 'fake freedom'? The freedom to be a slave? The freedom to work stupid hours for minimum wage, which is nowhere close to being enough for you and your family?
This should be a right guaranteed by government then, the right to a good job? Generally such ambitions do end in widespread misery.
What he said.
Dude - - if you read my posts on ZH (and even if you don't) you should recognize sarcasm at some point (it is a hallmark of the English, no?) Jesus - I'll be literal and Germanic from now on - - I'm - f-ing satirizing those who claim the un-employed are worthless and lazy ... I certainly do NOT feel that way ... if anything the opposite...
(of course, except when we talk about ethnic minorities - - who really ARE lazy)
...now, would you like an explanation of that too...?
Your 'family' is one medical crisis away from bankruptcy. It sounds to me like you don't have any insurance unless your adult children are attending college.
... well, unless you live in commie/socialist hell holes like England, Denmark, Sweden, Canada, Australia, New Zealand ... whew.., this list is long.... SO would you like to live in one of those hell holes? Huh.... would you, Commie. ??? Just remember - you never had it so good in the USA ... never ... um .... ever... like, never
I refuse to buy health insurance. And no way am I going to let any government make me. It is against the constitution and I refuse to get it. Let the communist bastards go home. This is America. I will quit working and move to the woods before I let them make me buy health insurance.
you won't have to, read the law, if you chose not to buy insurance, you will not be jailed or caned or hanged, you will instead will be required to pay a tax for being uninsured and the tax cost will be much much lower than cost of buying insurance (even when govt subsidizes cost of inurance for lower income workers, tax will be lower than that)...given that you will almost certainly cost govt something at some point if you are uninsured, as hospitals still provide emergency care etc to uninsured, requiring uninsured contribute to some toward the costs care for uninsured via a tax does not seem unreasonable to me.
Of course, commie states don't make people buy private insurance, they are more efficient than that, instead they tax people and govt provides insurance in one nationwide pool, and in case of Canada, services provided by private doctors and hospitals, (just like Medicare, but for all ages just not over 65) and in the case of UK, it is both govt insurance and service providers are also govt employees (doctors, nurse, hopsitals). These systems cost about half of what we pay. Both our private sector and govt sector healthcare is inefficient. About half our healthcare dollars are gov programs: Medicare for old, Medicaid for poor/disabled, Vets etc..and the other half is private system for young workers. Since we pay double per GDP of other developed countries...the govt half or health care costs and the private half cost as much as what other countries pay to cover their whole country....so both our corporate and govt systems suck compared to tyrannical commie countries...which by the way, if you spend any time in Canada, UK, France you will notice they have not lost their political liberties in relation to us by have more efficient health care systems..France sure knows how to protest
do you have the financial capability to provide health care coverage for yourself and your loved ones? can you afford treatment for you and your family? minus any type of insurance? if you can afford to pay cash or the like any time you decide you need treatment and you are not, not paying which the people who pay... like myself end up footing the bill for... more power too you... if you are broke and stupid and just running your mouth becuase those of us that do pay are stuck with your bill, then fuck you.
Thanks to minimum wage (which is what the $1200./mo. equals) and forced benefits, employers hesitate to expand their workforces. Why should the terminal unemployed get out of bed for minimum wage job, if the government provides minimum wage benefits? They should have a sliding scale of benefits, weeks 1-12 $400./wk., weeks 13-24 $300./wk., weeks 25-52 $200./wk. with unemployment benefits ending after one year.
Plus, they could give employers an additional tax deduction of $5K per new employee kept for at least one year. If they can do "Cash for Clunkers" and "Cash for Home Buyers", why not do "Cash for New Jobs"?
Cash for Jobs would slay the sky rocket the job creation rate. With lax reporting/regulation you might have entrepreneurs act like the Census and create thousands of new jobs a tax to get Uncle Sugar's money... they make it lax enough and I'll open my own company and make hundreds of new jobs a day :)
You should be candidate for Nobel Prize in Economics. You just discovered new mechanism which creates jobs out of thin air, just abolish unemployment benefits and you have created 6 or 7 million jobs instantly! Everybody will be willing to work and they will find those hidden jobs everywhere! Bravo!
This is the grim reality.
Imagine that, government interference in the jobs markets creates inefficiency and economic destruction! Who ever would have thought!?
The socialists?
<sarcasm off>
That could happen, certainly, but I imagine if we completely lost track of these people they would get removed from both the labor force and unemployment rolls, i.e. numerator and denominator. Regardless, you're not going to see a 100-200 bp uptick in the unemployment rate because of this.
Now, I expect you might see the unemployment rate test 10.1, 10.2 because of the census winding down in the next few months, but that's another story.
12 step program.
Step 1.
And if (semi-permanent) evacuations begin in the Gulf region... check out this video of a LA resident (with first-hand knowledge of some of the BP "clean-up" operations) speaking her mind ~ tells the audience her two kids are developing resperatory problems...
http://www.youtube.com/watch?v=z-UzU48-aWM
you gots to spel rite if you want too post on this blog.
Don't be an ass...be gracious. Misspellings are no reason to jump on someone's back.
Don't be an ass...be gracious. Misspellings are no reason to jump on someone's back.
We reserve that for double posting
piss off, the message takes priority
beech!
What about the 3 million college students that just graduated?
The people who won't have EUC will be replaced by the class of 2010.
Non-event.
They also have the sweet punch of non-discharable student loans. Could only think this song is appropriate to the graduates. http://www.youtube.com/watch?v=W21dBbtcfjk
If you want to see some real shit about what a depression is all about watch this documentary I found on PBS today.
It's basically a documentary about how 14 - 16 yearolds were forced out of their homes to live on trains because their parents couldn't afford them.
Really kind of touching watching some of these people cry talking about their experiences.
*During the Great Depression, more than 250,000 teenagers lived on the road in America*
http://video.pbs.org/video/1502653730
Various posters above suggest that many unemployed are not looking for work. I tend to doubt it but I wonder if there is any reliable information/study regarding this?
But tell me please, where are the fucking jobs anyway?
I see many more elderly working in McDonalds, Pizza Hut, etc. I have a relative who spent more than a year hunting really hard for a job before he found it. The jobs just aren't there and are becoming fewer.
If there is ONE illegal immigrant with a job, it is because a citizen Won't take it.
We are about to find out what happens when the tick gets bigger than the dog it is riding on.
They might both die.
You mean working for minimum wage or less at some of those places doing some seriously crappy work because you are here illegally ? They need to start going after those companies more.
Sir, I ask why does that worker have to be illegal? I have been a LEGAL immigrant in three different countries and all it takes is paper work and will power. Why defile the place you covet instead of contributing to its bounty?
Take away minimum wage and unemployment benefits and I assure you'll be able to find Americans to take any job. The real question is are you willing to pay more for that tomato so that you won't have to pay more in taxes so that the illegals can have access to your hospitals and schools. Free of charge. There is no free lunch.
Disclosure: I am currently a LEGAL immigrant of the USA.
yeah. Jump on board the truck at 5 am in Phoenix with the illegals to go work at some construction site and see how welcomed you are to work with them to get the money under the table. You know nothing but what you are told.
I ordered a pizza about a week ago and the guy was like 65 that delivered it and I am noticing a lot more waitresses in the mid 40's to 50 something age group also... That tells me they are hurting and young people dont have many jobs available to them like before.
You see this in Europe all the time. Here, we have an expectation that a person will continue to get better and better jobs.
The problem is that most people are trained to do one thing, and, if jobs aren't available at that one thing, the person is screwed.
I came up the hard way. I have a pretty cushy job, now, but if things went sour, I'm not above painting houses or driving a truck.
It's my understanding that the US Govt. also spends a lot of currency encouraging the formation of small businesses, retraining, etc. Time to use what's between your ears for more than wearing a ball cap backwards.
Retraining outside of work is a very inaccurate process.
Jobs first, then train.
"I came up the hard way. I have a pretty cushy job, now, but if things went sour, I'm not above painting houses or driving a truck."
Agree. At the risk of sounding self-righteous, I don't get people who "resent" work that is "beneath them". Work generally sucks. It isn't some fucking vehicle for your self-actualization, unless you're very fortunate. I started out bagging groceries 16 years ago. If I had to, I'd do it again. I'm sure I'd bitch about it constantly and daydream about shooting the smug stupid customers in the kidneys on a daily basis. But I'd be damn glad I could keep a roof over my head and food on the table. Both sets of grandparents taught me that if you have those things, you're doing fine, and a lot better than most in this world.
A really good observation and truly at odds with trends. Personally, I have always started over, not always from choice. I think idea that people will have stream lined careers is going to be tested the hard way.
I believe the vagabond is coming back.
I ordered a pizza today and the delivery boy was a tall white guy in his early 50's to mid 50's. Looks like he could have been a bank rep. But the service was good, he was courteous enough to close the door while I held the pizzas. They normally don't do that. The last time I ordered a pizza it was a late 40's professional looking woman. All other times have been teenage to 20-year old kids.
I had the same pizza man this weekend. If he was driving a mid 2000's Dodge then we must be neighbors.
Other than, ideology, why would you doubt it?
Interviewing for a job is a degrading experience. Anyone with half a brain would avoid it at all costs.
Try looking for about a couple of years. Then discover that you're being forced, but they aren't - they just wait you out.
Time to change that.
My burgers have been tasting better.
That is no joke. I picked up McD's and everything was actually in the bag. I might start driving home without checking to see if the entire order is there if they keep it up!
This situation tears at my soul.
The government safety net is at the root of a lot of evils in this country. Perhaps this is the best and necessary outcome. Perhaps it is not. Perhaps this is the too small to save finally being forced to walk the plank.
My gut reaction to this is this is what comes of "institutionalized" compassion.
The government is not responsible for the "welfare" of our neighbors and countrymen; we are each as individuals. It is up to us as individuals to seek our own way in this world, but is also incumbent upon us to "keep" our brothers and family; to treat each other as we would want to be treated.
I see no way forward but collapse of this rotten system, but this should not harden our hearts; all worldly things come and go age and die. We can through our good honest works and ingenuity, provide for oursleves, and provide our own safety net for our family, neighbors, and countrymen. We do not need "the state" to look over us, all we need is each other.
John 15:17
This is my command: Love each other.
What about the one that says "Take care of the widow and orphan"?
Riiiiiight.... Widows and orphans...
http://www.youtube.com/watch?v=YfGLB8LO1aM
http://www.youtube.com/watch?v=T__t2EygPkQ
"The government is not responsible for the "welfare" of our neighbors and countrymen"
...coool !! Then they can't tax me, tell me what is legal and not, and can't nstitute a draft and send me to war. Deal???
"The government is not responsible for the "welfare" of our neighbors and countrymen"
...coool !! Then they can't tax me, tell me what is legal and not, and can't nstitute a draft and send me to war. Deal???
And the market will continue to go up! Happy days are here again!!!!
Music to the GOP's ears! An Obama failure is all they can think to want. Unfortunately for the serfs, the pain is very real.
Nuance, they want Obama's plans to fail, which would be good for everyone but Obama and his ilk. Try to keep in mind the only thing growing right now are: government jobs and, rapidly over the last ten years, government pay and benefits. Obama is a statist above all else and wishes to get and keep control by creating a permanent majority of well paid government stooges and government dependents. France has been captured exactly in this way, and will never recover from it. California might.
Having lived on the "below" side of the money-less line in the US for a good few years, I'll say that living there (I'm back in home country now" felt like a total tread-mill existence.
You had to keep at it, on top of it, every day. And so I dropped out, painted houses, sat in jewlery stores, tried yard work if I could get it. Fascinating time.
Lack, if looked at squarely in it's face as just another phase, can be the greatest teacher.
It's all a small matter of internally re-adjusting want and need definitions.
The US job market has been a joke for years. Jobs, kind of comoditiy-ish, as as much slave to the basics of demand-supply as any other commodity, barring manipulation.
Keep stretching the rubber band, eventually it will break.
ORI
http://aadivaahan.wordpress.com
The most obvious observation in all this is the fact that the Republicans are cynically, maliciously and dangerously doing everything they can to derail any attempt by Obama and the Democrats to help lift the economy between now and November. And it's all over power. They're happy to let the poor, the elderly and the jobless continue to eat shit, as long as it means that they pick up some seats in November.
It's enough to make you vomit.
Democrats have the majority in both houses and the Presidency, plus if the situation was reversed the democrats would be staling the republican agenda.
OMG politics are sleazy and self-serving.
Yes, but the difference is that the Repubs had the GUTS to smash things through with less than 60 Senate votes, no matter how vile the smell. The Dems obviously don't.
Sad, really.I'd give them a gut transplant if I thought it would help. God knows I have enough to share.
Dr. S: Say, Toto, wouldn't it be a wonderful world if our elected officials wanted to do something more than make the "bad guys" fail?
Toto: arf!
enjoying your comments - welcome addition.
that said, could it be that the current dem agenda is so far left that even the dem centrists are nervous?
i'm certainly no repub, but have to wonder why anyone would call the repub votes obstruction, when by their very definition, these proposed solutions go against the grain of everything a rebub is... (reverse parties and the question stands)
it's not that *any* party who votes against the current admin doesn't care about the ... children, environment, schools, cancer patients, salamanders, unemployed, earth-crossing asteroids ... (pick one) it's that most of the parties who vote against the current proposals have *very* different ideas about debt and fixing these issues.
this polarity is being effectively manufactured and fomented - don't play.
if we can remind ourselves to focus on the issues, we might have a (non-violent) chance.
one issue, one vote. 2000 page bills, my ass.
I don't know that the dem agenda is as much leftist as statist. They are passing laws chipping away at constitutional rights and constitutional restrictions on central government power, and doing it in the dark, or on weekends, or the eve of national holidays, very regularly voting without reading bills. The endopoint they want is a politburo, and strict control of the press, private industry, and individual choices. Note the current DISCLOSE act intended to muzzle open criticism of what they are doing. They know the Supreme Court will not likely not review it before the November elections.
+++ it's all way beyond unsettling.
hopefully we can untie their knots and put in (re-establish) some safeguards (against both/any main parties doing this crap)
if you have to sneak it, it's probably not based on the will of the governed.
unless maybe they actually *do* know better than ...
The only difference between the republicans and democrats policies
is the respective resumes of the people to whom they give free money.
The democrats give a little of it to the poor, while the republicans give it all to the very wealthy.
Both partries are teaching people to steal, and undermining anyone who still does honest work.
no other difference.
that they all give to those on 'their side' is spot-on and not surprising in the human condition.
the other broad-stroke generalizations aren't up to your usual level... power just buys more power. the channels (e.g. the poor, cap/trade, health, war...) are just a cover.
barney frank(d) / chris dodd(d) et. al. aren't giving much to the poor these days...
Tell me how taking every failed Detroit policy of the last 40 years nationwide is going to "lift the economy", instead of turning the whole country into some weird Chicago/New Jersey hybrid of ghetto dependency.
Certainly true. Except for the vomit part. I've developed a pretty stiff control of my gag reflex, thanks to years of jobs in corpulent America.
But let's face the fact that even if we ALL pulled together in the same direction, all of our efforts assisted by a Galaxy Class starship's warp drive can't lift this corpse between now and November or even now and forever.
We've got to gut the whale, give everybody a smaller piece than they want and start fresh. And it isn't going to happen until nearly all of us have real jobs that add something useful to the economy.
No amount of green paper or plastic cards creates food or weaves clothes or forges tools or builds shelter. People working together do that.
Wealth is nothing more than the result of productive human labor.
Fighting over power, gold, shares or pobble beads doesn't feed baby. We humans have to do that job.
It's, in fact, not enough to make me vomit.
But what comes close, if it's any consolation, is intelligent, mature members of our society believing there is a substantive difference between democrat and republican.
There is not.
The reports that I have read say that the Republicans were holding out for an offsetting cut in spending. That seemed to be the crux of the argument. Happy if someone corrects my mispercepton.
You're correct. Scott Brown was on a radio show in Boston and sounded exasperated about the situation. He said the repubs just wanted the bill to not increase the deficit and said they have more unspent "stimulus" money sitting there than is required to pay for this bill but the dems wouldn't hear of taking that already gone money and using it for this. From his point of view it kind of sounded like -shocker- the dems are letting the benefits run out to make political points that the repubs are mean.
why not start with corporate farm subsidies being slashed. see what the repubs. say then.
That's one of many worthwhile targets for slashing. Don't misunderstand me. I'm pretty much a libertarian. The repubs are *slightly* better on economic matters than the dems.
I don't agree with having 99 freaking weeks of unemployment benefits. But if you told people that's what there would be, then you have to live up to that. I'm not one of those libertarians who wants total laissez faire tomorrow. I tend to agree with the repubs on this one, that it should just be done so as not to add to the deficit.
Then, they should look at a thousand other things sucking down a trillion dollars.
That's what I hate about the "debate":
It's like having someone ask you, "Surely you don't believe that?" after explaining your belief/opinion. Stopping the programs overnight would be total cannabalistic bedlam; there would be a logical transition. My view is that it is too late either way. Ron Paul is surely brave for sticking around this late in the game.
You gotta love Joe:
"there's no possibility to restore 8 million jobs lost in the Great Recession."
at least he speaks the truth... sometimes.
http://www.cbsnews.com/8301-503544_162-20008924-503544.html
I will believe when I see it. But if this is true, then it truly begins.
Good, maybe we can slowly make the bread lines visible. Too many TV heads out there are still buying into the "recovery". Like any kind of recovery first we have to realize we have a problem. And maybe, just maybe J6P will realize that the Reds and the Blues sold their futures away.
Curious, what is the relationship between unemployment insurance, welfare and food stamps? Perhaps those food lines are still some time away.
The food lines exist today. Go to the food store on the first of the month when the food stamp cards (SNAP/Supplemental Nutrition Assistance Program) are credited.
... agreed ... food stamps, welfare and unemployment ARE the new food lines. This is a bit insidious in that the magnitude of the problem is no longer visible either in the main stream media or the alternative media so there is no visual sense of how bad things are ... just a number is reported and it becomes as obscure as your SSN, your telephone number or Avogadro's constant
Let’s call it $2 Billion a month in benefits paid out... just for conversational proposes...
$750 Billion (TARP) =’s 375 Months… or 31 plus years of benefits?
I think we all can agree that the stimulus Packages… or monies being poured into the AAA Rated Corporations coffers exceeds the trillion dollar mark in multiples…
So, is the burden of debt really a bunch of couch potatoes milking the system? Or is the real problem or the real burden the amount of monies being poured into Wall Street?
The real problems are belittled daily by a bunch of wanna be Republican Conservatives… who pontificate about people pulling themselves up by their own boot straps or abortion... while the Country is Robbed Blind!
Drill Baby! Drill!!
Austerity Measures! For / or Against the un-employed / fellow American Country Men and / or Women… while we (as a Country) offer Tax Breaks to Companies who move Jobs Offshore / out of the United States.
The Democrats continue on the same path as laid by Bush… The Lobby controls our Government in Total! The Lobby owns US! ALL!! No exceptions!
The un-employed benefits being paid is NOT! the drag that is holding US! As a Country! Back…
Excellent point! But it is still a lesser of two evils argument, how about no evil?
Some people just can't let go of their ideology for a second.
It's okay to believe that the government has bent over backwards for the banks, AND that 99 weeks of unemployment insurance is too much.
I guess some of us are meant to be referees; others, cheerleaders.
brett: it is also true that the money spent on unemployment benefits is nearly !00% back in the economy in a month (and probably not for the fourth flat screen) while the money given to the banks to avoid the shareholder wipeout, bondholder haircut and management replacement a free market would demand is far less recycled into the economy. so even the gimlet eyed managers of efficiency who care nothing for social justice might opt for giving money to the relatively poor rather than the relatively rich.
and then there is the example of the nordic countries restructuring of bank debt (which worked) and that of japan (and the u.s. and europe) of bailout (which didn't).
Forgive me if I don't view the half of my earnings confiscated and given to some Entitled dependent as "recyled" into the economy.
The fourth flat screen I didn't buy myself still came out of my paycheck, but is sitting in his bedroom, instead of shoring up my meager savings (or retirement, ha!).
I'm 24 years old doing absolutely everything responsible, working 12+ hour days, living a comfortable but very modest lifestyle, racking up zero debt, and making an amount you'd laugh at, and my number one cost is STILL taxes I see nearly zero benefit from.
Don't tell me what I worked for is better being stolen, laundered through a bunch of socialist control freaks, and handed out in various dependency programs to deadbeats. If I can live below my means, so can they.
Long life and prosperity to you young person.
.... and how about those "deadbeat wars" we engage in and the money and productive capacity they and the ridiculous defense complex soak up ... don't forget them ... lets get all the deadbeats together in one basket, eh?
This site used to be a place where Austrian economics got a fair hearing. Now it is a cheerleading section for Hugo's latest expropriation.
Indeed. This is not a tough love crowd, but that's the right approach with 80% of deadbeats.
and who, and by what method do you seperate those 80% out from that 20% ... can't wait to see the criterea...
$2 Billion a month in benefits paid out... (instead of the $1.1B) just for conversational proposes...
$750 Billion (TARP) =’s 375 Months… or 31 plus years of benefits?
This site used to be a place where Austrian economics got a fair hearing.
Sadly, that hasn't been the case for at least a month or two. I'm afraid that's not going to change, either.
I suppose the answer "well, we shouldn't have given the TBTF all that cash in the first place - but let's not compound a major f-up with another one, okay?" is just far too "heart"-less for some to contemplate.
Brett, I agree infinite UI is likely not a great idea but its the hypocrisy that gets to me. We are endebting our country, but when we do it for high end medical benes for elderly, did anyone talk about the unpaid for, high debt increasing Medicare Part D that pass during W admin...not many, not many conservatives or Dems. Sure, I'm for paying for some prescription drugs for poor elderly, but Part D did it in a way that was extremely costly because it made Pharma members a boat load of money. Then there are the wars, we can't afford them either, but do hear anyone trying to economize on them, saying we should not fight them if we can not pay for them. And what of our military empire around the world? We are starting up AfricaCom now, so we have every continent except Antarctica covered by a permanent military presence. I have a friend who is a 20+ Warrant officer and for his next assignment, due to a promotion, had the following location choices, Arizona, Denmark, Japan, Italy, Germany, Guam. Really, how many freaking places do we need our military squatting when we are bleeding deficits back home? And we used to have an estate tax in this country and everyone, including economy did just fine. Now you might be categorically opposed to rich heir losing one dime of their parent wealth when they die, but it does come a cost, less tax revenue to government, more deficits. And then there are the housing support things...like how much did the $6500/$8000 home buyer tax credit cost us, just slow down the reduction in the price of housing for a few months. And what of backstopping Fannie and Freddie. But banks and the FIRE industry like these ultra-expensive "helps" to consumer (all it does for consumer is increase the cost of housing and then have govt subsidize away some of the increase cost...some help) so you hear much less crying about them. Have Repubs seriously stopped support for Fan and Fred, put anon holds on things, filibustered the housing tax credit. Compared to all these things, tax credits that often helped certain crony businesses or sectors and the more wealthy and employed in our society, wars and a military empire that seems worthless to stop terrorism by a handful of nutjobs blowing something up domestically, bloated Medicare programs that could be cut an still give decent care to the most needy....I would say long-term UI is the least repulsive more cost-effectively helpful to economy and to regular people of them all. So of course, it will be the most resisted of our all our deficit inducing policies.
To cut thru all the partisan crap, we should just implement a pay-as-you-go policy. If you don't want to increase taxes to pay for it, don't do it. If you really want to do it an small increase (form zero) in estate tax is a popular way to pay for it, tax the rich. Once we can't deficit spend, then we can look at ALL our spending and prioritize.
We should be forced to look at all our taxing and spending and which most important, which is least worst, or most helpful to the eocnomy as a whole. What is it: some military bases in Africa or long-term UI support? No FICA tax past 100k income, or solvency of Soc Security? Support to housing industry, or federal support to keep teachers on the job? Mortgage interest deduction to homeowners or income tax cut for all people? On and on..
Since we deficit spend like mad and we should be rightfully scared about it and should stop it, elites can invoke this scary thing whenever we ask for something of great benefit to ordinary folks, and but they also can ignore it when other equally or more expensive things are done to run up debt: war, bank bailouts, tax credits/reductions, govt support of certain businesses/economic sectors...etc...so without the painful pay-as-you go, any spending can be rightfully called into attention while other spending or tax cuts can be quietly ignored for they also great impact on our deficit.
mm - where you been?
nice to see at least a few folks cutting the partisan crap and looking at the actual issues again.
there's hope yet.
<irony>
i'm starting the 'no-party' party
(yeah - yeah, that'll fix it)
</irony>
Republican bankers deserve the money, especially since "trickle down economics" has proven time and time again that money flows down, not up. If you haven't noticed, the rich are getting poorer, while the poor are getting richer. For proof, go to a Ferrari dealership in Manhatten and then go to KFC in the Bronx on Sunday. Which one is busier?
Anyone who voted for Obama/Satan/Marx/Hitler simply does not deserve the money. They need to wait for the money to trickle down.
excellent examples
Long-term unemployment really began around 1930 when Hoover leaned on employers not to lower wages. Previously, workers' earnings fluctuated w the business cycle. So, full employment was the norm in good times and except for the very onsest of recessions/depressions, in bad times as well. (So people had to save during the good times and were not invested in inflation.) Now they count on the govt to print money to bail them out.
The needy have welfare programs. Maybe we're at the point where those who are long-term out of work either go the welfare route or get back to work wherever and for whatever wage their services are really and truly worth today - and work the 60+ hours per week I worked for decades if need be to make ends meet or meet their earnings goal. Per JFK: "Life is not fair". But the Dems were less far down the socialist track then.
Or the long-term should be able to find work and be able to have a lot more negotiating room.
Expecting only them to be forced (by virtues of survival) is asking for a very inconsistent situation.
there is not much "general assistance" anymore, if you are unemployed and past UI benes, about the only people who can get anything are single parents with children and no job, and even that, since Clinton times has had time limits, generally 5 years, no money for additional children etc...
Yeah, that's heartless...
and another thing! - remember: the homeless are homeless because they are lazy and made bad decisions... (harumph... serves them right)
+1000
This point is not often realized. And it was part of how Hoover dramatically worsened things, not be doing nothing but by doing absolutely the wrong things. Signing the moronic Smoot-Hawley tariff law that created international trade wars and hurt every country's economy and working to keep wages up in the face of massive deflation thereby causing more unemployment.
Frankly, some smaller companies still follow the policy of reducing wages and hours rather than laying people off. Larger companies just lay people off.
I thinking reducing wages does make sense and really in the scheme of it not so bad because some things go down in price accordingly, like housing...right now, we get a bit of two Americas, the people who were in wrong place when musi stopped and are 6 of them for every new job that opens up or the people who are lucky, very good, in right place right time, to still be working for as much or not more than before and finding things like cars and housing much cheaper, especially relatively to their salary while the long-term unemployed are in a world of hurt. The thing is, my small employer reduced everyones wages 10 percent last spring and then had us go down to 30 hours a week (20 percnet more cut) in winter, our slower time. Also several people have gone to permanent parttime work. If they cut wages more, they still would not hire people, they are just trying to be profitable. And we, with our reduced hours at slow times of year are enough staff to keep company going, so reduced wages just means more profit for owner, not more jobs. In a small way this explains jobless recoveries...workers not in high deman so they demand less money, while businesses sales are down, given this increased "productivity" they can still be profitable, if not more profitable. Technology adavancement and global wages and illegal immigration keep value of US labor lower.
So any reduced wages, maybe reduce hours, but if business has already slowed, no matter how cheap labor is, there may not be more jobs simply because wages are lower.
TPTB want all skilled labor (Appliance Repair, IT Workers, Doctors, and Lawyers) to have more competition from overseas labor markets, that is why Bloomberg and Murdock want to 'reform' immigration... Forget educating more Americans for those roles, nope, we want to import them so they can be paid a lesser wage and put downward pressure on the wages of higher skilled labor.
It isn't enough to reduce manufacturing to minimum wage, skilled workers need their wages reduced as well.
I've got a question...
Some folks say the unemployment bill shouldn't be borrowed, pay for it out of the unspent stimulus money -- supposedly $300+ billion out of the original $787 billion is still unallocated and unspent.
Other folks say just as adamantly that all of the stimulus is gone, and the $300+ billion unspent is just a myth.
Anybody have any idea if there is actually unspent money from the original stimulus? A link to a reliable source would be great. Thanks!
It's kind of moot, since all of it is borrowed money anyway.
Also, since we're apparently now going to operate the country without a budget, who's going to pretend to keep track of it?
see below
Nail-Head correlation on that one, Doc. +112.5
The $787+ billion is a rolling total, no more than that amount outstanding at any one time. Therefore, there is always $787 billion more.
Love it, LOL. +211.2
No group is more responsible for the disastrous condition of the US economy that economists – those shiny pants academics who are on a public dole for their entire “careers”, which appear to be teaching other people how to become economists.
Would deflation of College Tuition really be such a bad thing? Or, should kids at Princeton continue to go into massive debt just to hear pearls of wisdom from the likes of Krugman and Bernanke?
Actually, Princeton financial aid is quite good. You get a grant for the difference between your parents' contribution/your contribution and tuition/room/board. The vast majority graduate debt-free.
it wasn't summers running their endowment, was it?
their financial aide may not be so great these next few years...
Good one. I suppose this depends on your perspective. As a guy making large coin a few years back my perspective was this - For my efforts and success I got to pay the full 50k a year on my kid. The neighbors, who made 60k a year, didn't pay a dime. The real subsidy was me paying my neighbor's kid to go to school because his parents weren't as hardworking or ambitious as me.
But I guess if you're an inexperienced 18 year kid you might not consider that the Ivy payment system is just one money transfer mechanism.
At the end of 4 years, my household is 200 grand poorer and my neighbor's household is even.
Great point (I'm surprised someone didn't junk you yet).
All of the incentives are messed up in this country. Build a TBTF, and get bailed out when it goes south. Lose your job, and get 99 weeks of unemployment. Buy the biggest house you can with a mortgage, so your tax bill to uncle sam is lower. Save a couple grand in the bank, and earn 0 in interest income for a year.
Do you honestly feel that your hard work and ambition deserves you a higher wage? Sorry to break it to you Peter Pan, but we don't live in a meritocracy.
+++ clearly!
oddly, that's still the main capitalist selling point. (i keep biting... and getting bitten?)
Splendid!
dick
but, but...this is a jobless recovery no...? who needs jobs anyways?
I was travelling around Malaysia the last few weeks, a few observations from a non-Malaysian:
1.) Help wanted signs across many retail stores across the country. In general there seems to be a labour shortage at all levels of the economy. My brother-in-law was poached from Cisco to Brocade for a 25% pay rise (data storage). He said Cisco were having to cancel sales due to a lack of engineers. Even tea plantations in the Cameron Highlands are also having to close down due to a lack of plantation workers.
2.) Generally the housing market is doing well (I was buying an investment property), my bank was busy churning out loans, business was very good for them. In the capital they seem to have overbuilt on the very high end condo side and there are a few disaster stories, also travelling around the country I did see a number of examples of overbuilding of landed properties / shop lots. I would guess it should take around 3 / 4 years to eat through the oversupply...but then there would be a shortage due to the demographics...
3.) Inflation is a major issue one of the main drivers is that the Malaysian government is phasing out subsidies for basic goods like sugar, petrol, etc. The government will be saving large sums once this process is complete which can be channelled back into infrastructure projects (badly needed at a local level), so growth seems very sustainable if they can address the labour issues.
It’s also worth noting that Malaysia has no social security system and major medical expenses need to be paid out of your retirement savings if you have no other funds...but everyone seems to get along...in fact a lot of people run secondary businesses to supplement their income so I would even say this drives entrepreneurship amongst the lower/middle class.
Anyway this is just what I saw with my eyes and from conversations with friends/family.
Obviously, you must be lying - somebody junked you.
yep. My former employer moved most of their operations there from the US. Is this a surprise?
Interesting.. You made some observations, shared them, offered no political play, and some asshole junked you.
Wierd.
Show yourself scum.
Jobs are for little people.
And what is the concept of a common job in the progression from industrial-->information age? Typing in inputs to algorithms?
Extend or start making it harder to refuse to directly hire people (or trying to play games with that via staffing firms) on a good faith, long-term basis. Not the best choice, but expecting the unemployed to make the sole (or greater) sacrifice is absurd.
It's time that business makes the same sacrifices that the unemployed are making. If we're being told to make sacrifices for jobs, they make sacrifices by hiring. If they aren't qualified, train them on-the-job. If they're not recently unemployed, start giving them more opportunity to not be refused.
It is inconsistent to only force the unemployed half to seek work while letting the other half not be forced into providing the opportunity.
Could you expand this thought a little? I'm confused (as usual).
How could you possibly force a company to create a job, find more customers for whatever service it provides, then hire and train someone?
Employers would have to cut the wages of their existing, highly skilled employees and forced to give their money to an unskilled worker. That would be great for morale and profits.
Did I miss the sarcasm again?
Somebody seriously needs to give me an incentive to continue providing the jobs I'm already responsible for.
This old jackass is getting tired of paying everyone else to ride on his back.
Fix the following inconsistency:
The unemployed person is bound by law to look for work, yet the other end is not bound by anything to take them(much less on a good-faith, direct basis).
Secondly throwing many qualifications out the window makes HR actually have to work for once. Not just throw senseless qualifications in the way.
Thanks for the reply.
I'm guessing you have had some serious problems finding work and wish you all the best in your quest.
This economy sucks and businesses are simply trying to tread water. Just don't see how you can force anyone to hire someone.
Thanks for the good words.
My thought is that I am bound(and thus, forced) by law to look for something that may/may not exist while the other end of the table is (slightly) more comfortable at waiting the unemployed out. I'd be fine if the force was extended only to direct-hire employers that thought themselves TBTF(taking bailout cash), or are government contractors.
If they contributed to the problem with being TBTF/receiving & defending bailouts at the high end, they should be obligated to assist in solving the problem. I don't want the proverbial mower job to go because of those regulations - but creating loopholes is not my thing either. There are very few ways to (with civility) harm government without harming individuals in the process.
I'm being asked to put all that risk, hardship, and all that on my back as well as being asked to be more disposable. While you may be treading water, I am being asked to increasingly hold my breath for the hope that I would be allowed to surface. Not for holding debt, but for doing a proper job search and getting nothing.
Right now, only geography(and a bunch of people already in dire straits there) is between me and wanting to work the cleanup effort in the Gulf. The oil, dead wildlife, and the additional things COREXIT puts in are no problem. Neither is the duration.
Unfortunately, you are among the first casualties of this calamity. You will find no comfort in the fact that you are only the first squad to be sent naked against this financial gatling gun.
We are all behind you (watching in horror as our future is revealed).
As an energy trader, this "recovery" caught me off guard for quite a long time.
Since the summer of 2008,
Jet fuel use has dropped by over 10%. Truck fuel use dropped by over 10%.
the number of intermodal trains rolling by my window dropped by 90%.
But ...gasoline usage has stayed almost constant.
I have observed that the percentage of Hummers and jacked-up pickups has diminished
while the number of sedans and subcompacts has picked up markedly.
but gasoline usage has held constant.
Finally, zerohedge has helped me to figure it out.
All those people collecting unemployment benefits
are driving around town all day long, every day,
putting in their quota of job applications.
If what you say is true, that so many people are just about to lose their benefits,
then crude oil could be getting ready to take a big, big hit ...
SS, this presumes that full-time benefit requirements are inherently 'the right thing' and that employment is somehow a right.
if i need an hour of lawn mowing, i don't really owe the mower-dude and his family health benefits. i pay for what i need. let the mower-man build his benefits into that hourly price. then we can negotiate.
people who think like you scare me (and currently rule the country).
you can do this crap for a while, but realize that it's all only a loan. the bill may come later, but it always comes.
You know, as much as I loathe Seth's line of thinking, I could tolerate that plan as long as the "target corporation" has/had access to the Discount Window.
Ok, deal. At the very least, it limits the damage to those who call themselves TBTF.
It's that a good deal of UI does not do well for anything other than survival.
Just that I'm seeing a lot of "sweep the unemployed under the rug" more than any real success for the unemployment office(in getting people in work that is worth more than the UI). Where both government and business want to be rid of these people. That's not something that one should live with.
i concur
some jobs just aren't there anymore - and the people still are. ignoring them is not a good option. making them comfortable isn't either.
not many have been made uncomfortable enough to do what needs to be done (move, change skills, etc.) and that's where the debate truly starts. (and i'm not trivializing the difficulty of moving - but as Sam Kinnison (dead comedian) used to scream about ethiopians: " there's no food in the desert... MOOOOOooove.")
this is NOT an easy problem for either the payors or payees - they both have valid concerns and interests to defend.
Scary, yes. You have every right to be. Now you know how I am.
However, the new thing is to throw endless qualifications and other roadblocks to make things easier for HR. On top of that, retraining doesn't do anything on the large scale when targeted to the unemployed. Finally, what work does exist is offered on the terms that the person has a pulse and no ability to negotiate out of it.
You should try a year and a half of unemployment. That will probably scare you even more.
It is not fun, and it is worse to be swept under by statistics, then have the other major party mistake you for a multi-generational welfare recipient.
Be glad that I'm at least wanting to work. Just not at developing-world conditions or wages that UI exceeds.
for wanting to work, +1,000,000
for expecting anything from anybody, however often it used to happen that way... -10
best wishes in your efforts.
excuse me but you are wanted at the communist blog over there.......
<door slams shut, lock,>
I have long wondered if the end of unemployment cheques would be the event which "wakes up america". It is akin to taking away the anti-depressants. I don't believe that these people will all just go quietly into the night. Trouble is brewing, fast.
Its the employed that need to wake up. These fucking idiots are being looted silly and are okay with it. What are they going to do? Give up their fake jobs and head for the automated factories? The Gold hoarders around here don't want any economy at all. The historical complimentary paper currencys that really threatened central banking all required date stamps to be bought and placed on the notes to force people to spend it. But this to the gold bugs is absolutely criminal. Nobody discusses mutual credit systems around here, just that fucking stupid yellow metal.
One mutual credit for you ( peon ) ,100 deferred (unstamped)mutual credits for me ( TBTF ) . Can't make me spend if I don't want to ,asshats!! Oh are these going to be carbon credits , or air credits, or warm boby contributing to the system credits , or slave time credits . or time served credits?
Quatloos, bitches!
I want the warm booby cretits.
You are half totally correct and half totally incorrect. But, please, rant on regarding your lack of understanding of that stupid metal.
Tyler........... please PLEASE stop inviting all these fucking communists over here. I NEED zero hedge to go back to being an anarchist/libertarian/Austrian economics snuggle spot!!!!!!!!!!! HEEEEEEEEEEEEEEELLLLLLLLLLLLLLLLLPPPPPPPPPPPPPPPP
Sounds like you get $1,200 a month unemployment benefit is that right?Over here in blighty, you get £65.45 a week - that's £261.8 a month at $1.45/£ that's $380 a month,roughly one third,and the cost of living over here is much higher, "gas" as you call it is nearly $8 a gallon!
I've looked at other countries,Ireland used to pay 920 Euros a month unemployment but has reduced it to around 800,how people survive on UK dole I just don't know.You have got it tough in the states but it's a lot worse here if you are out of work.
http://www.direct.gov.uk/en/MoneyTaxAndBenefits/BenefitsTaxCreditsAndOtherSupport/Employedorlookingforwork/DG_10018757
...yeah but you're not counting housing benefit - - and the grand 'ol disability benefit which 1 million people are on. That takes it up to about $1200 p.m.