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H.R. 5618 - Extending Unemployment Benefits– A Bad Bill
The House passed H.R. 5618 on Friday along party lines. This bill would
extend unemployment benefits to November 2010. To see if your
congressperson voted for this bad legislation see this list.
I have two major objections to the bill. First is that this is not “pay
go” and second this is all about politics and an election.
The House bill was structured as an “emergency” spending bill. This
designation allows for it to be exempt from the pay go rules. I am one
of those who think that the biggest emergency the country faces is the
size of the budget deficit. This bill would add $34 billion to our debt
load. Here is how the CBO scored it.
If the Senate passes this bill it would extend benefits to the end of
November. Gee, that is a convenient time. Just a few weeks past the
critical bi-elections. This bill has little to do with structural
unemployment. It is about buying votes and trying to sustain political
control of Congress. Those that support/vote for it will say that they
are doing so to help the unemployed. Actually it is just more bad
legislation. This is about politics, not economics.
The Senate has gone on a ten-day holiday and will pick up the proposed
legislation when they return. The vote will be on party lines. As of
this weekend that means the White House has 57 of the 60 votes needed to
pass. Olympia Snowe (R. Ma.) has indicated she will support it.
Therefore they are two votes shy. If this deal clears the Senate and
becomes law it would mean that two Republican Senators had their arms
twisted, that or they had their political palms greased with some form
of side deal. Washington at its worst.
Does it matter that we are adding another $34b to our debt load when the
debt is already $14 trillion? Not really. This only increases our debt
by a ¼%. It is equivalent to about 20 days of interest. We are in so
deep at this point that $34b is a very small number. How is that
possible?
I think the outcome of this legislation is important in a number of
respects. It will influence markets and the economy.
-If passed, it will be a weight on the dollar. Outside of the US every
country is singing fiscal conservatism. We stand out in the opposite
camp. Passage of this bill will be reflected in the capitol markets.
-If enacted it will have some short-term beneficial impacts. It will
keep consumption going for a bit longer. More I-phones will be bought,
the number of defaults will be a bit less, there will be some monthly
data released that will hide some of the weakness.
-The President’s fiscal commission will release its results on December
1st. The day after the extension of benefits will expire and three weeks
after the election. There is no way this temporary extension will be
extended at that point. Either we hit a wall then or we hit a wall now.
The President and the legislative side of D.C. will not be able to avoid
the recommendations of the fiscal commission.
-If this bill is not passed it will accelerate the slowdown that now
seems to be coming at a frightening speed. Consider these two graphs of
the number of people who will be impacted. By the end of July the number
grows to 3.2mm. These are big numbers. This will show up on Wal-Mart’s
sales. It will show up everywhere. Consumption will drop. Landlords will
not get paid. Confidence will drop. Markets will drop. Federal and
State revenues will drop. Deficits will rise. Debt will rise. These
things will happen sooner versus later. H.R. 5618 just buys a few
months.
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Bruce,
If the US can afford to bail out banksters with hundreds of billions, surely it can afford to extend unemployment benefits to people teetering on poverty. I am all for capitalism, but let's make sure we take of society's most vulnerable first.
I am sick of everyone bitching about 'bailing out the banksters' -- who by the way have almost all [except AIG] paid it back. (Only the political bail out of the unions at the car companies and AIG will be the real losses to the taxpayers.)
The real problem is that with or without the spending on wars the "welfare fraud and illegal-immigrationfare" have been sucking billions of bucks and moral fiber of this economy for decades. The rot is finally too obvious to hide.
Jobs are not an entitlement. Unending government hand outs are not an entitlement. Free housing is not an entitlement. Unaffordable loans are not an entitlement. Taking out a loan that you know you cannot afford is theft. When are we going to acknowledge that government sponsoring all of these things is not only unsustainable but stupid.
I think we should pair off cuts of bloated government employee salaries with the extention of these benefits, otherwise let the revolution begin.
Dude, the whole US financial system has been backed by the soverign(taxpayer). I can't think of any bigger, immoral "entitlement" than to guarantee the private loses from the TBTF, speculative activities of GS and company.
If 4 people have money and 1 don't, do you want to take money from those 4 so they get into trouble paying their bills to? Thats... communism man!
Sometimes we need to sacrifice the weaker for the safety of the group. Keep giving money away till the money jar is empty won't do any good. Let's get people faced with the facts so they do something about it.
For example: Since I was a kid there have always been projects for africa to give them money. A well, a school, food, weapons... nothing made them do something about their own future! I'd rather hear: If you make something, we'll buy it for a little extra more!
Leo, Stop using TARP to defend everything that you want. What is TARP costing us in the end? Less than the $34b if you exclude Chrysler and GM. Many of those positions have already been cashed in at a profit. TARP was just a gag to fool people into thinking that the banks were fine and the economy was okay. It worked. 6 months after the money went into the banks it came out. It was a show pony. No substance.
This bill does nothing for us. It is crap about your safety net.How long shoud this go on in your opinion? 5 years 10? We are not such a rich country that we can afford to do this. You are worried about 1% of the population. I am too but I am more concerned with the other 99%.
What is going to happen is going to happen. Delaying things with a dumb bill so an election can get skewed is bad government.
I'm with you, conceptually, on austerity, Bruce. Believing that more debt can solve the problem of too much debt is the height of lunacy.
TARP, though, was only a fraction of what we spent bailing out poor judgment on the part of the banksters. According to the document accompanying Kashkari's testimony last year, the total backstop was almost $23 trillion.
Talking about the 'cost of TARP' is meaningless because everything that's been recouped has been used as sort of a general-purpose slush fund and it's all going to wind up going down the rathole anyway.
I disagree with the black-and-white thinking that is so prevalent. All government isn't bad. All government isn't good. All safety nets aren't bad. All safety nets aren't good. All financial businesses aren't bad. All financial institutions aren't good. All Congresspeople aren't bad. All Congress people aren't good.
Here's the key: What is it we want to accomplish? What do we want our society to look like? What is it that works best for both the collective and the individual? Put yourselves in the shoes of others before you come to a conclusion about a policy -- because someday you may be in the same, or similar, shoes as that person.
Bruce, if you were one of those unemployed looking for work, I'm pretty sure you wouldn't be singing the same tune. Corporate tax rates in the US are a joke. Millions of people starving and the fat cats on Wall Street and elsewhere are pooing on this bill. What a travesty of justice and it's sad to see smart people like you buying into this twisted logic.
Nobody in America is starving. Nobody.
I'm no smart guy. But there are plenty of folks out there that are smart. And they are thinking/talking/writing on my wave length. Debt is death.
We are going to fight you tooth and nail on this one. You and Krugman. You are out of step. He said today on tv that we should spend another $500billion of borrowed money. He said it would not make a difference if we did. To me that is the "dark side".
Don't buy that crap. You're smart enough to know the difference between right & wrong. Picking on a bill that extends benefits to people struggling to find work is just plain wrong. Period.
What percentage of unemployed workers do you think are really, truly out there looking hard for work? Why is it that when a person's unemployment compensation is due to run out he, more often than not, miraculously finds a job?
Leo, if the bill is that important, find a way to fund it. Quit hiding behind this "emergency" bullshit and start making some tough choices!
Leo, did you know that when Marie-Antoinette said "Let them eat cake" she was actually refering to what we know as brioche? That's that doughy white bread that most Americans eat every day. So guess what, they're already eating cake!
"Picking on a bill that extends benefits to people struggling to find work is just plain wrong. Period."
Leo I assume you are being facetious, if not please think through what you just wrote and take it to its not so logical conclusion.
I junk you because i'm sick of all the whining liberals here. Zero hedge is a conservative site. Go back to your mommy and your government tit and let the Americans who are left sort it out like the Colonel. I can't stand whining ASS LIBERALS who think they should just live on the dole. Listen you sniveling panty-waisted anonymous moron, the jobs were sent overseas by NAFTA AND GATT in the 90's and it is over here. No amount of printing money changes that. People need to understand this and get a skill and get off the grid and get with the program. The sooner the better. And yes I take my own advice and I've never worked for the gov. or expected anyone to pull me out. Jeez..
Conservitive site? I have never tought that.
Check your facts on that NAFTA comment, Horny Bill went along wit the Repubs, thinking there would be a nickle in it for him. I have a skill or two and one of them is thinking for myself. Mr. Bush II was intimante with the Saudi King. It is all over UTube.
http://www.youtube.com/results?search_query=bush+kisses+saudi+king&aq=0
you sir, are part of the PROBLEM. you still think I'm worrying about republicans and democrats? I'm way past that paradigm. And Nafta was signed by Bush I. I could care less who is intimate with who, it's not going to impact my life. And I don't have any interest in being a bedroom or thought police for anyone, I just wish they would return the same courtesy. We are a republic, not a democracy. Or we were, until a bunch of morons decided to use our government as their own private police force/ATM. I am a constitutionalist. I mourn over it's death this holiday. I mourn for the deaths who were in vain fighting their phony wars . I mourn for the freedom that was once ours.
I bet you never even saw Fight Club. Huh? You have no clue if all you can throw out there is Bush kissing his Saudi bitch.
The old incentive argument? Cut off their benefits and they will find work....some truth to that, but not in this economy. I prefer giving the umemployed the benefit of doubt.
so you're serious.
What's wrong with paygo? What's wrong with stimulus $ being used? More importantly how long does the social safety net last? November? Two years from now? Why not take a homeless person into my house? Or why not let a down on their luck family move into my vacation property as it sits vacant or give them a break on the rent?
SOooo.. What's the rent? I was just kinda thinking, you give me a deal on renting your property, and send Leo the bill. Everybody wins. Apparently Leo won't mind.
At least not if he wants to ignore the fact that the leftover stimulus I already borrowed remains unspent.
Do you honestly think these same people will magically manifest jobs by November? GET FUCKING REAL. THERE'S NO INCENTIVE TO LOOK FOR JOBS THAT DO NOT FUCKING EXIST. This is piling on more debt for political gains.
I have been outta work for over 2 years, sans any unemployment funds. I made the changes that I had to in order to survive. If folks can't make those same/similar changes 99 weeks later... well, they never will.
I'd be interested to hear what you have done. How do you survive without cash income?
I hate the argument...I did it, I survived, so screw the rest of you. You just are a bitter person. The fact that there are not enough jobs is exactly the reason we should be providing a safety net. From what I've read and heard is that the benefits are just a fraction of what people were making -- from something like $100 to $400/week. So I don't think many people are living the high life on that money.
For the record, I did not junk you; and actually, far from being bitter, I'm happier and more enlightened as a result of said changes. I will never go back to my old mode of living, irregardless of my income.
island,
listening to the likes of you... i prefer that argument. (i did it, survived, so screw the rest of you). perhaps he's not bitter - but simply realistic that today is no longer like yesterday, and won't ever again be
and most of us still don't realize it.
best wishes to those who will find a way to be useful in the new world of *today* and tomorrow.
it is you who will have a future.
to those who wait for another check and *hope* for magic while you watch the world cup... well, i try not to swear at folks like you on public forums.
My god , that's 1600$ a month, for 24 months now
Long live America! That is like the salary they pay for President of India, hahhhaahah
Great country man!
Sorry, but your "safety net" is nothing but a Straight Jacket for everyone else!
Instead of reading his post as bitter and fuck you, why not look at it as someone who succeeded in surviving a haircut and has a hard time listening to whining? Why not see his post as a positive instead of a negative.
Indefinite unemployment is no longer a safety net. It is socially acceptable welfare.
Haircuts are coming people. The issue isn't Have or Have Not's, it is Can Do or Can't Do. I interpreted the comment as more people Could Do if they would apply themselves.
To those who would junk the sentiment:
I just finished eating my supper that consisted of venison burger gravy over new potatoes, peas and a mixed green salad. We ate a jar of home canned applesauce for dessert. Other than the spices and a little oil, not one ounce was bought at the store.
I am still employed, but see the end in sight. Could be two months, could be a year. When I do finally get the axe, the adjustment isn't much of a leap. Can you say the same?
Words cannot adequately express how important what you just said actually is.
+ 1 incredibly ice cold beer to you.
Leo, they aren't going to find work. Stringing them along is false hope.
Stop "Going Galt" and just start hiring.
Or at the very least, anyone who took on TARP money has no business refusing the unemployed.
http://globaleconomicanalysis.blogspot.com/2010/06/yet-another-keynesian...
But stealing more money from those who have it (via taxes or currency depreciation, and probably the latter), is just plain right. According to the lunatic socialists among us.
It really depends on how the people who have the money , got the money. I would argue that the 140 Billion paid out in bonuses to bankers last year and again this year, to people who don't really need the money , they just want it, is far more troublesome than 34 billion for 5 more months of shelter.
Lets not also forget that when the unemployment gets shut off , social services gets turned on. If I get my figures right , a single person gets $360.00 per month for housing,( if section 8 housing is available , they get the difference between what they can afford and what the rent is) $165.00 for food, $160.00 for incidentals, medicaid ( that may be worth $1500 a month right there) and few more odds and ends. So what is the net difference between Social Services and Unemployment sprinkled with COBRA help and without it? It will probably be a wash.
So I'm not really sure why we are arguing this point. Do you want a pay-go on the 34 billion? How about kicking back the 140 billion in bonuses from last year alone that the bankers got thanks to 34 alphabet programs no one can really name right now who should have been allowed to fail?. We also know, from these very pages , that TARP was a tiny down-stroke on the real amount of money handed to bankers. How would it be possible that they could pay back TARP when 300 Thousand homes enter foreclosure proceedings a month and have been for the last 16 months. They are getting their money from somewhere. Those loans aren't throwing off cash. They aren't making new loans
So as long as this argument for 34 billion "IT all stops HERE, we NEED people visibly starving to make our point" is seen for what it is , total bullshit, then go with it if it makes you feel better. Personally I think anyone who advocates for that before we try 1000 other things is a total and complete asshole.
Here are some realities: we can easily defend this country with 100 Billion a year, end the two wars and the 100s of bases around the world, and cut some of the 16 intelligence agencies plus remove other agencies and pay for it without busting a sweat. Who are we protecting here if the defense of this country is making people go hungry and die?
What about Govt pay and Pensions? I find it remarkable on this site that this isn't mentioned: that the 2.9 million people working in govt at a median pay of $119,000 a year at the federal level with 20 year retirement plans and 30 year retirement plans letting some retire at 38 and some at 48 , plus having all their health benefits taken care of plus they get to double dip and quadruple dip in Social Security, Govt Pension Plans, post Service Pension plans, spouses various pension plans plus investments from houses that have gone into 7 figures or more in DC from living there for 30 years? Don't people think there is more than enough to keep people from begging if we said "pick 1 pension plan" and there is an across the board 20% cut in Govt wages .
There is much more that can be cut. We are no where near cutting off peoples food supply. It makes me wonder then , why so many people are anxious, practically cheering, to have it done.
DBurn,
Not up on welfare and UE bennies, but pretty sure Section-8 is separate. I see people living in $1,200/month apt sometimes and paying like $15/month of the rent.
Socialists promise an orgy pyramid (@ 2:46):
http://www.youtube.com/watch?v=zixQYDeRtzI
But instead we get Orwellian, Luciferian prison rape (@ 6:43):
http://www.youtube.com/watch?v=niqrrmev4mA
Truthfully, it's getting awfully hard to get worked up about the ongoing thievery. The "end" has been predicted so many times now, with absolutely no confirmation, that we are all comfortably numb. We can't even manage a convincing stock market crash, fer chrissakes.
Wake me up when something, anything, happens...
"Wake me up when something, anything, happens..."
ditto. however, are your preparations complete? Personally, I don't mind the extra time to add to my preparations.
It is about buying votes and trying to sustain political control of Congress.
Don't be naive; this is the inevitable outcome of pluralistic democracy (pluralistic = everyone gets to vote).
A step in the right direction would be to repeal the Seventeenth Amendment, which made Senators directly elected rather than appointed by state legislatures as was the intention of the Founding Fathers and the original Constitution. This would allow Senators to vote for what they thought was right rather than trying to bribe the masses in order to win reelection.
Such a simple concept, yet the Dept. of Education doesn't endorse that view for some reason.
I remember "Impeach Cheney first!" signs.
Same with the 16th Amendment.
Right on Reductio. Also, Term Limits for Congress. 8-12 years would be a good start.
I prefer my term limit plan. As soon as they show they're really serious about politics by presenting the signed nominating petitions and putting down the filing fee, we take them out behind the court house and shoot them in the head.
This would dramatically reduce the number of dilettantes reaching for the gold ring. Sure, we might lose a few idealists who actually want to help, but it's worth it overall.
What worries me most, is that the slower the slide, the more incremental freedom we give up. It will take something drastic to make people stand up and say, "Enough!". Perhaps a few million who consider themselves "middle-class" ending up on the dole NOW, is a start.
There is no good solution to this one. I feel that the best we can hope for is for it to come crashing down while we still have the freedom to take our futures into our own hands. We are not far away from that point of no return.
Thanks for the article Bruce.
If by "FREEDOM" we mean the ability to buy a lot of crap on credit, then yes, this is the end of "FREEDOM"
And from talking to too many people and reading their rants, buying crap on credit is the single most important right we Americans cherish anyway.
Buy, buy, America.
If you think there are very many people ranting on ZH, advocating buying on credit, perhaps you started drinking a little early today.
You make a very good point, Colonel, regarding a slower slide being more worrisome. Unfortunately, when I observe most American citizens and compare them to our grandparents' generation I fear that we have already slid so far toward tyranny and fascism, away from liberty and a republic, that we may be beyond recovery. I pray we are wrong.
Unfortunately, I think there is too much real pain going around to want to be against this bill no matter how idiotic. Particularly since we can agree that it is hopeless to expect this, or any CONgress to enact legislation that would really stimulate job creation.
However, from a purely anarchistic perspective, a vote against the legislation will hasten the day when people rise up because the SHTF.