Ask an economist to explain a recession and you’ll likely get a description that involves declining demand, slowing production and an accounting of this or that “excess” in the economy (this time, it’s screwy mortgage lending and the housing bubble) that has to be wrung out of the system before things can be set right.
Ask a worker to describe a recession, and it’s much simpler: It’s when people lose their jobs.
This is why in every recession since 1958, Congress has enacted a temporary extension of unemployment benefits beyond the customary 26 weeks of payments made by states. The stopgap benefits keep families afloat during times when jobs are scarce and the duration of a jobless period can lengthen well beyond six months.
The money flows quickly through a system that’s already in place-no new bureaucracy is needed to dispense it. The cash goes to people who have been directly affected by the downturn, not to those who may never really feel the pinch. That’s why the Congressional Budget Office recently rated extending unemployment benefits (along with temporarily enhancing food stamp benefits) the most efficient and effective of the ideas proposed for inclusion in an economic stimulus package.
Looking back on the experiences of long-term unemployment insurance recipients during the recession of 2001, for example, the CBO found that average family income was half of what it had been when a recipient was working. About a third of these families saw their incomes fall below the poverty line, and 40 percent lacked health insurance. Mark Zandi of Moody’s Economy.com has estimated that every $1 increase in unemployment insurance benefits generates a short-term boost of $1.64 in gross domestic product.
Unemployment insurance is such a surefire way to get money to people who will spend it immediately that, historically, it has been called an “automatic stabilizer.”
Now House Republican leaders are calling it “extraneous spending.”
The bargain that led the Bush White House and the bipartisan leadership of the House to reach a deal on an economic stimulus package was that the Democrats had to drop demands for government spending of any kind-even spending that puts money directly into the pockets of people who’ve lost their jobs. In exchange, the Democrats won tax rebates for some wage earners who pay Social Security and Medicare payroll taxes, but do not earn enough to pay income taxes.
That’s better than failing to give these workers anything at all. But there isn’t anything logical about agreeing that low-wage workers need a break, while somehow the unemployed do not. Unemployment insurance isn’t welfare. It’s not pork-barrel spending or any sort of boondoggle. It is designed precisely for times like these, when workers are laid off and can’t easily find new work because of overall economic sluggishness.
In fact, the system has long been neglected while the very nature of work has evolved. Part-time workers who are laid off usually aren’t covered by unemployment insurance, leaving millions-particularly women-without this safety net. In many states, a worker must certify that he or she is looking for full-time work in order to be counted as among the unemployed, even if the job that’s been lost was a part-time position and even if other common eligibility tests are met. Gaps in the unemployment system already have reduced the percentage of unemployed workers who actually receive benefits to under 40 percent, according to an analysis by the Center on Budget and Policy Priorities.
A broad overhaul is overdue. But trying to achieve this in the teeth of a looming recession, when the political impetus is to act quickly on a stimulus plan, shouldn’t be tried.
Ideological illogic shouldn’t trump proven effectiveness, either. Yet that’s the root of Republican objections to extending unemployment benefits as part of the stimulus package. The House Republican leaders, John Boehner and Roy Blunt, in announcing the agreement last week, cited unemployment benefits as “extraneous spending”-and crowed about keeping them out of the package.
Aiding the unemployed is not the moral equivalent of building a bridge to nowhere. No policy currently under discussion-including those tax rebates you may already be counting on-is better targeted or delivered more quickly. The Senate, which begins writing its own stimulus package this week, must help the jobless who are the very face of recession.
© 2008, Washington Post Writers Group
Bush and the Republicans have little or no problem with building an expensive bridge to nowhere, but they have a serious problem with ever giving anything to the poor. They believe in their Social Darwinist hearts that the poor should suffer, and it seems that most Republicans would rather sell their children into slavery than to ever do anything that could possibly benefit the poor. Heck, if they did, they might even be drummed out of their country clubs!
We should probably pity them, kivals, because they have to go through life with a hardened heart, and that is their punishment. The ice ball can not but freeze the hand that wields it.
Argh, matey, this be a dangerous crew. They’d happily put themselves in graaave danger just to sink a few rag-tag boats. Clever strategies won’t help ya none. I’d steer clear, f’i was you.
People need living wage jobs and debt relief. Here we go again, bailing out the rich who caused this problem and stiffing the people. Interest rates should be cut at the consumer level, not for thieving banks. Until we totally retool our economy away from consumerism and unchecked capitalism, there will be no cure.
Don’t buy anything, pay off your credit, start saving, grow food, build your local economy, promote community. We have been cut adrift, to fend for ourselves.
Unemployment has and always will be a moral issue to Republicans. It’s one of the things that separates the parties. Wealthy people are seen as industrious and admirable by Republicans, thus moral and deserving of bail-outs. Unemployed people are at best faintly disgusting to Republicans.
A “stimulus” that isn’t directly targeted at the unemployed and the fixed-income elderly, as well as everyone else, is pretty dumb fare.
To me it doesn’t makes sense to include business tax breaks in the stimulus package. Business will be the beneficiaries of the stimulus package through consumption. To give them tax breaks is allowing them to double-dip.
Yes to all of the above, but that’s what you get when you have two branches of one corporate party. And the House of Representatives is the worst of the worst. And Nancy Pelosi is either complicit or incompetent. I suspect the former, considering her cozy relationship with Bush.
kathyodat
the US is not in line for a recession, its going to be a depression for most of the poor and elderly, and the authoritarian state is ready to suppress all dissent, the Blackwater traitor camps are ready for all those starving traitors who don’t love our criminal wars and bow down to the rich who run the politicians of this banana republic.
all government economic policy — whether from rebub’s or dem’s — will aim to loot the people’s living standards in order to keep that bubble up.
As the worst president and most inept congress in the history of the nation thankfully end their respective terms in office, they can reflect on the economic carnage they placed on the United States.
Begging and borrowing to provide a paltry $300-1200 will not end the nations slide into a recession nor will it stem the tide of foreign acquisitions of US companies or outsourcing of our once valued manufacturing base. Nor will the stimulus package stem the tide of more US job losses. Simply borrowing more money in the form of tax rebates will not solve the crisis that is now America; the lack good paying jobs, historically negative saving rates, personal debt at all levels of consumption and the never ending and costly occupations sold to our reckless congress.
And yet, with the US fiscal crisis worsening and widening, the Bush team demands; more tax cuts for the rich, more money for Iraq, and continues to threaten Iran.
The end of Bush reign of terror will be greatly appreciated and applauded globally.
A temparary band-aid for Joe Six Pack. The problem stems from the oursourcing of our industrial base to Mexico and China..
Will the Hillary-Billary team discuss this as an issue and forget that Obama is a black candidate? Or will they go along with this phony fix..This cash will last one day at the most, and then what? We are heading for a major depression and the facts are being kept out of the public eye. Maybe the Billaries will donate all that cash that they made at Dubai-ports in a secret that has been kept out of the public main st press. Will Hillary discuss the outsourcing of jobs to India that she was promoting?
Both parties, although you can’t get it from this article, have been devoted to screwing the working class, A good example is when President Satan mentioned that “there are more high-tech jobs in America today than people available to fill them”
With this lie, companies can harvest and exploit talent at a much lower cost (H1B).
Firing, churning, laying people off, et al are all cherised business principles generally embraced by our legislature, so it would seem that “extraneous spending” is an accurate description of unemployment insurance. How long Americans can tolerate this abuse is another question.
“Now House Republican leaders are calling it (unemployment insurance) “extraneous spending.””
Well, according to Wikipedia: “Vultures seldom attack healthy animals, but may kill the wounded or sick. Vast numbers have been seen upon battlefields. They gorge themselves when prey is abundant, till their crop bulges, and sit, sleepy or half torpid, to digest their food. They do not carry food to their young in their claws, but disgorge it from the crop.”
With all due respect to the people at Wikipedia, Republicans have always tried to “gorge themsleves when prey is abundant” - or not!
In their warped, self-centered little minds, it’s perfectly legitimate to give welfare to the wealthy criminals on Wall Street who are responsible for creating one ponzi-scheme or economic crisis after another while they leave ‘abundant prey’in their wake.
On the other hand, those who have been left behind to drown in that wake are considered “public charity” cases; and helping those people survive the storm is considered “wasteful” spending.
We are and have been in an economic “battle-field” for decades. It is otherwise know as the “top one percent vs. the rest of society.” Any form of welfare that doesn’t benefit that top one percent falls under Republican mentality as being “extraneous spending”.
What arrogance! But even more appalling is that those who are being left behind will go to the polls next Tuesday and vote for these vultures.
Actually, we may never quite qualify as a recession. One standard definition is 2+ declines of quarterly economic growth.
Since “economy” is now globalized, if the Chinese laborers remain productive, our outsourcing CEO’s crafty enough, and our Big Boxes find markets outside of the US, then we could all be starving or homeless here in der Heimat — while we technically are not in a recession.
When this is over they’ll have to rename the Great Depression, the 1930’s recession.
Well, the problem is deeper than this.
Many/most of the big US companies have outsourced large amounts of labor, manufacturing and technology to Asia.
The profits they post on US stock markets reflect this differential. Cheap labor vs. consumer buying habits (producing profits).
So it’s possible that these outsourced Big Boxes may theoretically find even cheaper labor (Africa is next?) or consumer markets (China itself), thereby basically removing the American middle/working-class from the equation completely. The Big Boxes could then, potentially, post great profits even as a sizeable part of the US is starving. No recession.
Haven’t we been through all this before? More than once?
And so why do we continue to be run by international bankers?
Instead of the “Trickle down” theory which was a way to justify greed, I think we should start with the “Trickle UP” theory of wealth dissemination. We could grant large amounts of money to the unemployed, the homeless, and those below and near the poverty line. Then, they will spend it and the money will “trickle up,” generating an economic boom for the nation.
The economic calculations are ever changing and based on the ludicrous assumption that there are external costs not to be considered in decisions. Emptying a well by wasting water is free.
If a computer works 4 times faster yet costs only twice as much it is an economic gain even if it replaces a computer that could do word processing faster than needed by any secretary. What? The old machine did the same job for no additional spending. This kind of calculating keeps the inflation number down, as if we don’t see the prices in the store.
what a middle of the road - right wing that is, discussion.
While true re the role unemployment compensation has - shoring up the economy, there’s no mention of the havoc wreaked by unemployment - even worse than that by employment.
The lack of security is literally maddening. And of course, it means no possibility of having a job that allows a worker to benefit from long-time employment with an employer.
Jobs belong to the employers, to the bosses, to the capitalists. Their constant attacks on labor are essential to these capitalists.
Employment is not a ‘common dream’. Our work at jobs we own, for our benefit, the product to go to us, in gentle care of Earth is our ‘dream’ - socialism.
Norma
Norma J F Harrison
Member, Peace and Freedom Party central committees.
http://www.peaceandfreedom.org ,
http://peaceandfreedom.org/content/view/2/73/
http://peaceandfreedom.org/component/option,com_search/Itemid,81/
Unemployed workers = lazy no-goods looking to cut a fat hog at the expense of those god-fearing CEOs. The unemployed are cut from the same cloth as those wounded Vets who clog our parks and shelters with their whining worthless bodies.
Yep, it’s a great society if you don’t weaken. Assuming you are a Capitalistic Bastard of course!
If you were ‘born-again’ you’d be living the good life. and deserving it! The only ones left behind are obviously wicked non-believers who must pay for their sinfulness.
Why do we expect the Corporate yes-men to bail us out? Ayn Rand explained it all in the Fountainhead. It just doesn’t pay to be sentimental about the losers.
And, of course, the bottom line is that money must be made and profits spread around among the deserving. If the poverty becomes too unsightly, they can always move to secure compounds for safety.
Friends,be it known,you yes you and myself and your love ones will witness a world wide Depression.It has began to crawl,soon a slow walk,then run,and run fast.You must face it,there is no money.Our wealth is gone,and paper has replaced it.
xntrk January 30th, 2008 2:28 am - now that’s a posting!!!
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Like all of GWB’s prior state of union addresses, a retread. When he first took office, we all got those tax cut rebate check, and felt good. Sort of like a teaser loan rate, we (the public and world) have paid back with more than enough interest and penalties. What a sham and joke, but will buy some blinds for the house and wait for Jan 2009. Nice to see “bipartisan” effort to fleece the public - but that doesn’t take much. Gotta go, my Brittney Spears update just flashed and OJ email alert is pinging. Sexy Sadie what have you done….
What the USA is facing is a depression caused by financial illiterates, crooks in the mortgage industry and debt piled higher than heaven. Much of this is a result of Republican adversion to common sense regulation. The USA is no longer a market capitalist country, but rather a capitalist brothel. Yet the most remarkable thing about these egregious scams are the many Americans who continue to vote against their financial self-interest, the conservative, ultra religious middle class that is being torn apart by an incompetent President and a compliant congress. The unraveling of this economic mess will be most interesting to watch. Hold on to your seats!
Agree with all of the above…. and how!
What I haven’t seen is an overarching explanation of why the house of cards is falling. One post blamed “financial illiterates”, aka poor blacks. That’s only half the truth.
First notice that this is not yet a nationwide housing slump. Some local markets are flat, and some are still rising. The big losses are limited to local real estate markets mainly in NV, CA, FL where prices have already dropped about 30%, and will fall further.
The media talks a lot about sub-prime loans (above market rates to poor home buyers) being the only contributor to this crisis. I don’t believe this. Although this has certainly depressed home values in some poor neighborhoods, I fail to see how a few foreclosures could, by itself, cause a global financial meltdown,
The loans at the source of this debacle were deliberately created in “hot” markets to serve the needs of speculators. The risk was known to the loan officers and most, but not all, borrowers. The loan officers knew that they would avoid the risk by selling it on up the financial food-chain. Usually ending up in hedge funds, that why they have suffered such huge losses. The speculators knew they could “flip” the property before the rate balloned, but some got caught.
You must protect yourself. Look very carefully at any bank in which you may own a CD.
Is there a savvy analyst out there who would care to comment?
A stimulus? More like a joke. Once again the Dems allow/cooperate with/cheer, bank bailouts. The Law of Diminishing Returns is kicking in. Just as someone who’s maxxed out on credit cards, the USA has got to STOP SPENDING. Nothing else is going to fix anything. And the first place to stop spending is Iraq and military in general and the second place to stop spending iscorporate subsidies, including the World Bank and IMF. Unless we do this, with more spending cuts to come, it won’t matter what else we do. The Social Security and Medicare “trust funds” are empty. Wake up folks.
The very wealthy don’t need us anymore, the cream keeps rising to the top and they siphon it off.
Once they get all property into their name they can do away with paper money(Diebold will keep track)any money for that matter and let us starve to death calling it “survival of the fittest” … Social Darwinism.
They will barter amongst themselves and keep hungry Mexicans/South Americans on their compounds paying them in corn and beans, no health care.
I was talking to the local community college electrical teacher, he told us “you wouldn’t believe the amount of underground b o m b shelters that have been built in the last few years by the wealthy. He was sworn to secrecy as to who/where. He was hired to wire the generators/lights/cams.
Its coming people, stock up on veg seeds, dried beans/split peas(freeze to kill weevil eggs)canned goods, find a spring and have water jugs ready to fill.
Lock and load.
I wouldn’t go so far as to say, as one poster above said, “the very wealthy don’t need us anymore.” Nor should we be dismayed by their obvious belief that the poor deserve to suffer, as another poster pointed out.
There are still times when they need us whether or not they realize it; and their inability to realize it will be their downfall.
Why do you think there is such a growth in nosocomial infections in hospitals? (infections you get in the hospital that you didn’t have when you came in.) It’s because they keep laying off more of the lowest paid staff so the hospital CEO can still take home a big check. Guess who cleans and disinfects the hospital - the lowest paid personnel. The staff is cut to the point where the workload has grown to the point that, hell, it doesn’t even require resentment or disillusionment on the part of the housekeeper to cause the spread of infection - it just requires a workload too damned big for ANY normal human to handle. Most houskeepers I know still believe they have to work hard “for the patient’s sake”, but they can’t help it if they just don’t have enough time and too many rooms to clean, and AMAZINGLY have to beg for enough disinfectant from their supervisor who is also under orders to cut costs!
Eventually that very wealthy person is going to be in that hospital bed for SOME kind of treatment, and he’s got as much chance of “goin nosocomial” as anyone else! So you see my darling flowers, the top 1/10 of 1 percent ain’t gonna escape the final judgement of their filthy greed and disenfranchisement of everyone at the bottom. Even if the bottom dwellers don’t get angry enough to fight back, nature itself (or God, or the Cosmos, as some might look at it) will turn against them, and honey, they can run, but they can’t hide from a tsunami, or an earthquake, or a hurricane, or, yes, the tiniest thing they can’t even see - a MICROBE.