Friday, December 3, 2010

The 99'ers


Earlier this year, the US Congress agreed to extend benefits for the millions of people on unemployment; the total term one could stay on unemployment was 99 weeks, hence the term "the 99'ers". There are a little more than two million of these people.. and their time on unemployment has ended, beginning yesterday. By Christmas, all two million will see an end to their benefits. As next year unfolds, yet more people will lose these benefits with each passing month as well, but not in a deluge like this month.

There is now a battle in Congress by Democrats to try and extend this; the Republicans are putting their foot down, siting the need to reduce spending. Some conservative Democrats, calling themselves the "Blue Dogs", have agreed to extend the benefits.. so long as there are corrosponding spending cuts elsewhere. The total cost of extending these benefits three months would come to $12.5 billion.. which in Washington really is a spit in the ocean. Many Republicans argue that it's time these folks get off their @sses and get a job, no matter how menial.

For years, I myself would've lean towards the Republican position.. I myself have never in my adult life been without a full time job and have never received a dime from welfare, unemployment or any other social aid agency. But this time I'm leaning towards something different, and it's because I believe that America's problems are more serious now than at anytime since the Depression. I simply refuse to believe that this is a cyclical recession; these job losses are a permanent facet of life.

Unemployment is one of the few ways the US Government can directly help us folks on Main Street that does not involve trickling down through Wall Street. It also helps those who through no fault of their own are without a way to earn a living. As well as these things, it does some dandy things in the macroeconomics arena as well.. it helps consumer spending. The cut in benefits will hurt consumer spending.. at Christmas time as well. Better yet, it enables millions of families to continue paying on their credit card, mortgage and other bills instead of defaulting on them. For politicians, the immediate rise in the unemployment rate from 9.6% to over 11% might not be attractive either. At some point, even us econo-nerds must also realize the pain this will inflict on millions of families.

Therefore, my solution is this: extend benefits for those who live in counties where the unemployment rate exceeds 9% for six months.. which is probably better than 2/3rds of the 99'ers. These people are simply unable to find work. For those who are in counties where it is not, it's time to find a job. Here in Minnesota, we have plenty of entry level jobs available.. many thousands of people here simply don't want to go out into the cold and work for a living. Unemployment is not for people like this. How do we pay for it ? Given that this would cost approximately $2 billion a month, I propose the following cuts:

* Department of Defense: $1 billion/mo
* Department of Education: $500 million/mo
(slice aid to non citizen students)
* Slice "Earmarks": $500 million/mo

America's unemployment problems are not cyclical; we will not grow our way out of this. It's high time we as a nation begin to think about the serfs instead of sending armies abroad to fight in places we can't even pronounce and the pet projects of corrupt politicians.

Update 12/6pm: Obama has apparently reached an agreement with the Repubs: another 13 month extension of u/e benefits and all of the Bush tax cuts will remain in place for another two years. This is going to blow a gaping hole in the deficit. It's apparent that the path of least resistance in Wash DC is to just borrow and spend ad finitum. Tomorrow will be an interesting day in the Bond markets.

16 comments:

  1. Y'know, O Mean One, I find myself leaning against the way you're starting to lean, and I'm a bleeding-heart liberal. Normally, I would agree with your points about the lack of jobs, economic stimulative effect, etc. But I'm seeing anectdotal evidence of people milking the system.

    My wife has a friend who quit her financial-sector job in February 2010 because her boss wanted to double her workload and cut her pay 20%. Fair enough to leave, although we advised her to find another job FIRST. But she wanted to become a massage therapist -- the legitimate kind, with a license, something she had studied for before, because she's long had plans to abandon her accounting-type work. She's diddled around for almost a year, taking classes on anatomy, various massage techniques, everything but getting down to business. (Which will probably be a flop, because who needs another masseuse in a down economy?) Unemployment cheques have made it easier for her to avoid the real world.

    And I see people like a guy on "Judge Judy" (we watch her for the schadenfreudeic pleasure of seeing idiots get lectured) who was drawing $518 a week while getting cash money under the table for doing construction jobs. I read comments on blogs by people in two-income households who are getting the cheques while their partner continues to bring home a salary.

    I agree that unemployment bennies are needed for people who truly have a hard time finding work. It's bad out there, and the government should help. I just wish there was a better way to means-test who gets the cheques. It's not often I agree with hard-hearted bastards on the Right that way.

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  2. Bukko.. have you been to Ohio or Michigan ? Walmart gets to pick among dozens of applicants for each stocking position. It's just not there in certain places in America.

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  5. I thought I had something to say, but the fact is I have no idea how to fix this. My only thought is that if you cannot find a job that we are least have something that keeps people off the streets even though some could get a job and don't. My partner is 64 y/o and she cannot find anything. She works one day a week at a pharmacy and they would hire a young pup out of high school rather than give her more hours.

    My job situation is tenuous, but I will move wherever I have to rather than be unemployed. The FIRE economy is dead and so many American's were dependent on it. Now what will they do?

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  6. If you wonder what the US would look like without unemployment, food stamps and social programs? I think the picture Mr K used is pretty much it.
    Like Mr K I have always been employed and never collected UE, but I feel badly for those who get laid off and really cannot even get a response to their resumes. Alas the three month more for the 99ers is only kicking the can down the road for 3 more months.

    As Anon said it is really bad in the midwest, but I don't think I would stay there hoping things will get better. North Dakota, Canada, even Austrailia is looking for workers. The problem is many American's don't have marketable skills. Most of the paper jobs are all automated and what they did is obsolete.

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  7. Mr. K what do you think of this article? It is from one of my bloggers on the blog roll.
    http://www.declineoftheempire.com/2010/12/will-america-collapse-in-2025.html

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  8. Hi Queen.. I actually couldnt pull up that article, but by the title of it I'm guessing you want my opinion of whats going to happen here in the States. So here we go-- there will be, without a doubt, an economic collapse here in the states and globally. This is a mathematic certainty, and I doubt we make it past 2012 before we see it. The banks, the currency... all gone. When it happens, it will be ungodly fast (the collapse will take about a week) It will be awful for everyone, especially those in cities because of crime. I also think there is a chance that if it's mishandled in Wash DC that we as a nation might split apart into a few different nations (the South, the West and the NorthEast). But with time, there will be a new dawn; the Dark Ages & the Black Plague gave way to the Renaissance, and it will begin debt free, with new technologies propelling us into a new age of prosperity.

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  9. Try this and The Decline of the Empire is on my blog list along with yours. You really do some good posts.
    decline of the empire

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  11. Here is what I will say is that the average American does not have the coping skills to handle any type of collapse be it orderly or not.

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  12. Therefore, my solution is this: extend benefits for those who live in counties where the unemployment rate exceeds 9% for six months.. which is probably better than 2/3rds of the 99'ers.

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