GOP Cuts in Unemployment Brings New Level of Misery for Millions

It galls me, especially having recently earned an MBA in Financial Economics (in my “spare time”) at an age well north of a half century, to see the United States let politicians, who know absolutely nothing macroeconomics– with nothing but a sick psychotic need to feed their superiority complex– let their own people starve and waste their obvious will-to-work.unemployment

This is particularly egregious since we readily have the means to crank the economy up and have it purr like a 1970 4-barrel Pontiac GTO.  But how in the hell do we make that happen when GOP members of Congress think it’s no big deal to throw 1.3 million people into deeper poverty, homelessness, and a level of misery bordering on panic?

Since the GOP “Glory Days” of Ronny Ray-gun, right-wing think tanks and conservative politicians have held on to some arguments like grim death that they swear prove it’s a good idea to let unemployment benefits lapse for 1.3 million people. And none of those arguments hold up under the least bit of scrutiny. America’s economy would be far better off if Congress extended unemployment benefits, or got the hell out of the way of well-meaning Democrats who want to use tried and true methods of Keynesian economics to get the U.S. economy running the way it’s shown time and time again that it can run if left to its own volition.

If you look at the GOP’s talking points, one by one, you begin to understand that the Republican opposition to extending unemployment benefits is downright dishonest. I cannot for the life of me understand why it doesn’t alienate many voters, particularly in the south, where poverty is widespread. The American South, as a whole, has shown a remarkable propensity to vote against its own interest throughout its history.

So let’s debunk the GOP talking points one-by-one and hope that someone in this gawd-awful news media grows a set of cajones and takes notice.

GOP TP #1: Cutting unemployment benefits forces the unemployed to get off their couches and find some work.

That argument may be true in a good economy, but it’s patently false in a bad one, where there just aren’t enough jobs to go around. The scale of the US unemployment problem is far past the point of bootstrapping and teeters on the edge of falling off a cliff like the one George W. Bush created. The US has over 10 million people unemployed, 4 million of them for more than 6 months (what’s called the “long-term unemployed”). There are nearly another million people discouraged at being unable to find work, and 8 million others in low-wage, temporary jobs because they can’t find full-time work. In short, it is the worst employment market since the recession of the late 1970s and early 1980s and with even a minor calamity careen into a hole like the Great Depression or a large segment of the Eurozone. In addition, families, low on cash, aren’t helping each other as much, leaving the unemployed without a private means of assistance from family and friends.

The truth is, “bootstrapping” is not even available to everyone. It is determined by class, education –which is often a function of class– and race. Pew Research found that those who “bootstrap” successfully already come from a place of privilege: they are mostly white, college-educated, and in dual-earner families. This is an economy where even a college degree is worth less than it used to be. There are twice as many college graduates working for minimum wage jobs now than just 5 years ago. And roughly one out of every eight recent college graduates are unemployed, according to the Bureau of Labor Statistics.

GOP TP #2: Extending unemployment benefits will be a drag on the economy

The implication here is that cutting benefits will boost the economy and force people to get jobs. It’s a nice fantasy, but it doesn’t work that way. It never has; it never will. North Carolina tried cutting off benefits six months ago when the state found itself strapped for cash. The result? It damn sure wasn’t that more people found jobs. Instead, 95,000 people dropped out of the workforce entirely. At least under unemployment benefit regulations, recipients have to prove they’re actively looking for work and are prohibited from turning down a viable offer of work.

Net result: an increase in unemployed workers slammed the state’s workforce to its lowest level in 37 years, worsening the states already deep economic inequality and doubled the number of homeless to levels not seen since the Great Depression. Honestly, is this really what the majority of Americans want? Have we really sunk that deep into the depths of cruelty?

GOP TP #3: Unemployment benefits should be extended only after the government can cut other programs to “afford” it

Many Republicans, including House Speaker John Boehner, claim that aid to the unemployed should only be extended if the government cuts other programs in order to pay for the additional aid to the jobless. If this is what Republican House Congressional leaders want, then let’s start with them. Take away their Cadillac healthcare plans we the people pay for, cut the burgeoning size of their slave units…..I mean staffs….cut their pay in half since they are only scheduled to work 97 days this year (down from the lowest number of working days in its history achieved last year of 126 days), cut out their limousine drivers and any and all other perquisites unless their states want to pay the cost for them—being they’re for states’ rights of course.

Right; fat chance of that happening so let’s look at the problems with their lack of common and economic senses. There are three major problems with this talking point, but the very first is that–despite the stubbornly held idea in some Tea Party circles–budget deficits have little to no influence on economic growth, stock market returns, the value of the dollar, or even on who gets elected to public office (pdf). The idea that deficits are dangerous to the economy in any pressing way has very little, if any, plausible intellectual backing. This idea should get a lot more pushback and challenge, but since Congress itself is barely competent on financial issues, it does not. And the spineless, entertainment-run news media just wants everyone fighting because there’s only so much air time they can utilize (or sell ads for) with “real” news.

In fact, it has been far more damaging to the economy to cut deficits right now. Pursuing austerity has led to the loss of government jobs, as Federal Reserve chairman Ben Bernanke, and every reputable economist has said repeatedly. All you have to do is look at what has happened in the Eurozone for the past ten years, but even that is too hard for the U.S. media to recognize.

Secondly, the government can already “afford” unemployment insurance. Unemployment insurance is already largely paid for by employers, and the government tops it off. Because unemployment insurance is seen as an immediate need, previous Congresses have not held it hostage for budget negotiations. As White House adviser Gene Sperling pointed out, extensions of unemployment insurance – even during the five extensions in the Republican Bush years – usually occur with no cuts in other parts of the budget.

Thirdy,Congress has not proven any competence at creating a budget in a timely or effective way. It took Congress over four years of pointless mudwrestling, smack talk and endless economic wreckage to agree on a single budget – just last month – and even that budget is incomplete. It’s a pipe dream to believe that anyone in Congress has the appetite or competence to go another round like that to find appropriate cuts to match unemployment benefits. In addition, the lives of 1.3 million people should not be reduced to a political chip played by lawmakers who are, frankly, incompetent at fiscal poker.

GOP TP #4: Jobless aid is only a handout that does nothing to solve the underlying economic trouble

This argument holds no water, either. Unemployment is not a handout – unemployment insurance is paid for by employers, and accounted for in the system. It is true that extending unemployment does nothing to fix the economic recovery, but then, that is not the purpose of unemployment benefits. Boosting the recovery is the job of Congress to some extent, and they have done nothing since 2009 to pass legislation that increases jobs or handles job-promoting national issues, like infrastructure.

The congressional debate this week about unemployment benefits is a total diversion and has no reason to even be discussed. There is simply no reason not to extend benefits, and every reason to prevent over a million Americans from losing what little cushion they have. If the government has any responsibility whatsoever to its people, it’s to not force them into poverty when they have no other financial options for pete’s sake…..

Harvey A. Gold

Enhanced by Zemanta