Wake up Washington!
Over the past month or so, most House and Senate Democrats have been trying to get the extended benefits for the unemployed renewed until November 30th. Extended benefits are a federally funded program which extends unemployment benefits beyond the 26 weeks of benefits funded by states by up to 72 weeks. The program was first introduced in 1970, and has been used during every recession since then, and when the unemployment rate is over 5 or 6 percent. History shows that this program works, and Congress has never allowed the benefits to expire while the rate is over 7.2%, until now, with the unemployment rate at 9.5%, the highest in 32 years.
It appears….surprise, surprise…that ALL of the Senate Republicans are refusing to approve the extension of benefits, primarily because it will add to the federal deficit. Duh! Of course it’s going to add to the deficit, but to use a phrase made famous by Senator Bunning, TOUGH SHIT! Just because it adds to the deficit doesn’t make it a bad thing. Consider this: While people are unemployed during this recession, which is seeing the worst unemployment levels since the great depression, they still need to eat, and pay their bills while they look for suitable work. It’s important to note the word “suitable”, and I’ll explain why a little later. If you think these people are on vacation, then you’re a idiot. I’ve been out of work since January of 2009, and have looked for work in my field every day since then. At one point, I had started my own business as a website designer, thinking that the extended benefits I was receiving would carry me through until my business starting earning on its own. Well, when my extended benefits got cut off, I had to abandon the business, and now I’m looking for work that will pay anything. I guess this is what the Republicans want; for people to shelve their entrepreneurial aspirations, and just shut up and take a job making minimum wage.
The above unfortunate scenario is happening across the nation. And here is a sneak preview of the economic carnage that will result from not extending benefits while the unemployment rate is this high: First, the labor market will be flooded with people who are desperate to take any job, regardless of pay. Employers will be enjoying a huge pool of over-qualified candidates for any open position they may have. The laws of supply and demand will then take effect, and pay rates and salaries will drop. They will drop like a freaking stone, and then guess what else? Deflation. Inventories will increase, but consumer spending will plummet, because the consumers aren’t making enough to live. Prices on goods and services will drop, credit will completely dry up, foreclosures will increase, and the economy will basically go into the toilet. You think things are bad now? Wait. Forget about buying a car, a house, or sending a kid to college. The middle class will be turned into peasants.
40 years ago, some pretty smart economists figured out that it takes time for a recession to burn out, and the last thing you want to do is to add fuel to the fire by flooding the labor market, which is why they recommended supporting the unemployed. Yes, basically paying them not to take a job that pays less. Consumer spending will eventually pick up, and more goods and services will be required to meet the demand, this will create jobs, which will increase consumer spending, which will create jobs, and so on. Before you know it, the economy has recovered.
So, thanks a lot, you moron politicians for preventing the economy from recovering. Go take some economics 101, before you vote NO on something as important as extending benefits to the unemployed, or millions of folks like me will be voting “NO” for you.
