As Unemployment Benefits Peter Out, So Does The Recovery

As Unemployment Benefits Peter Out, So Does The Recovery

—by , July 2, 2010

Federal extensions of unemployment benefits have ended for over a million Americans since the end of May, as Democrats and Republicans in the Senate have made no progress on a further federal extension of benefits. And while lawmakers are off on vacation, another million and a half Americans will see their jobless benefits dry up by the middle of July.

The moving deadline of unemployment benefits is at a maximum of 99 weeks for the hardest hit states—26 weeks is paid for by the state, then an extra four tiers of federal unemployment benefits follow. States must reach certain levels of unemployment, 6 percent, 6.5 percent, and 8 percent, to be eligible for the second, third, and fourth tiers of federal benefits, respectively. Thirty-three states plus the District of Columbia have over 8 percent unemployment and all but three states have under 6 percent unemployment. And of the states under 8 percent unemployment, only two, Virginia and Maryland, are among the top twenty most populous states in the country.

To put it yet another way, 85 percent of the U.S. population lives in states with over 8 percent unemployment. And over 99 percent of the U.S. population lives in states with over 6 percent unemployment.

And almost half of those on unemployment, 46 percent, have been unemployed over six months. That figure hasn’t been that high since just after World War II.

So unemployment levels aren’t just bad, they’re really fucking bad.

But the overall rate is just under the high of the recession Ronald Reagan fought with spending in 1982, when the unemployment rate hit almost 11 percent. So why, then, is the party of Reagan fighting against extending unemployment benefits by refusing to vote for extensions that aren’t within the current budget?

Republicans in the Senate have filibustered any extension of jobless benefits unless the benefits are paid for—meaning a $34 billion federal budget cut. The recently deceased Senator Robert Byrd would have most likely voted for the extension, but as yet, West Virginia governor Joe Manchin hasn’t appointed a replacement for Byrd’s seat.

Or if healthcare-reform-dealmaking pain-in-the-ass Senator Ben Nelson would vote with his party on one of its longstanding core issues, we could be over with this. How much is it gonna take, Ben?

These convoluted tiers in the federal unemployment extensions started hitting a wall on May 30. Each tier has a number of weeks attached to it, and to qualify for the next tier, the unemployed individual had to file by May 30, but before filing, their current tier would have to run its course. So if you had three weeks left in your second tier the week ending May 30, 2010, you ran out of benefits the week ending June 20, 2010.

And that’s it. No more unemployment. Good luck paying bills.

Still, research presented to the House Committee on Small Business by Mark Zandi of Moody’s Economy.com (and rumored to be John McCain’s financial advisor during his 2008 presidential campaign) two years ago showed that aside from food stamps, extending unemployment benefits has the greatest benefit in GDP of all scenarios involving tax cuts and spending increases, a jump of $1.64 for each dollar spent (food stamps were $1.73). By comparison, a cut in the corporate tax rate amounted to a 30 cent rise and making the Bush tax cuts permanent was only a 29 cent rise.

Statistics are all in how you calculate them, but even given Moody’s involvement as a ratings agency in the financial crisis, Zandi’s numbers damn the regular cries of business interests as being less effective for overall growth than spending on unemployment.

And despite the debt crises overseas, it’s really not the time to be complaining about budget deficits. The strong economic years of Republican control (2000-2008) was the time to be complaining about deficit spending, and yet nothing was done to curtail stimulus and war spending. Republicans even cut taxes during wartime, a historically unprecedented and downright dimwitted move.

Perhaps the reason why the Republicans are gambling with the unemployment benefits of millions of Americans currently out of work is they want the Obama administration to fail more than anything. They know that extending benefits for the unemployed is effective, despite their moralizing tone about budgets, and yet they block it.

But it’s a dangerous gamble. If 2.5 million Americans can’t make their rent or can’t pay their mortgage or can’t pay their credit cards or can’t pay their student loans or can’t pay their utilities because their unemployment benefits have been cut and no one is hiring, then the housing market will experience yet another slump and the lack of spending will undoubtedly deepen the recession.

Have a nice summer vacation, Senators!

    reader responses
  1. Actually when someone doesn’t understand then its up to other users that they will assist, so here it occurs.

    comprar cigarros electronicos on 10/6/2012 at 10:35 PM 

  2. I can’t believe this I can’t find a job in my feild on even an old feild I used to work in. The company I worked for closed up in Nov.09 I’ve been unemployed for 7 months and 2 weeks and I go to the mail box today expecting to get a check and no I get a blank claim form no check. Then go on the cagov website to find out I’m two weeks short of being able to keep my benefits for another 3 months. I have no idea what to do now who is going to pay my rent and car payment?

    liz on 7/3/2010 at 05:42 PM 

  3. http://www.youtube.com/watch?v=GD-Msb7A8t4&feature=channel

    diane519 on 7/2/2010 at 07:07 PM 

  4. Saddam lived it up while oppressing the poor, we took care of that in a hurry! Senators while you’re on lofty vacations, maybe WE THE UNEMPLOYED will get help from other countries with a heart.

    dianev on 7/2/2010 at 06:54 PM 

  5. what is really going on? Where are the jobs that they are talking about? I sure would like to have one of them. ALL of this doesnot make any sense to me. If we have money to give to other countries, then where is OUR cut? And another thing, These Mexicans that are coming from Mexico doesnot even pay into taxes, they send the money back to Mexico. This whole country id Fucked Up. I cannot wait until the crime rate goes up, especially in the grocery stores. People I am tired, and fed up with this BULLSHIT. What does these people have against us? And why are they insisting that we be kicked in the streets? While they are eating their hotdogs I am here with a can of sardines. Hey what about that dogfood meatloaf recipe? Can you email it to me…..?

    Stephanie Mims on 7/2/2010 at 06:00 PM 

  6. Every Administration decision is political: That’s why in 70+ gulf days, no DC leadership (wants to blame not act which might “offend” political supporters); no suspension of law (as Bush did Katrina 2005) and offered foreign assistance not accepted (unions favor); States’ begged assistance slow or turned down (environmentalist favor); take over auto industry (govt. control – union favor); health care “reform” (govt. control – trial lawyer favor … no “tort” reform); EPA won’t “recertify” Texas refineries (environmentalist favor – will raise carbon fuel prices and shuts off more well paid jobs … that really helps, doesn’t it?); more financial industry regulation (govt. control … continuing failure to acknowledge Carter / Clinton CRA forced loans to those who couldn’t pay … forced anti market behavor – took 10 years to fall apart). But, everyone knows it was all Geo. Bush’s fault. Yea, right! Today’s Democrat Party – yesterday’s Socialist Party. Today’s Republican Party – yesterday’s Democrat Party. Hope many saw World Financial Leaders reject recovery policy by more government “stimulus” spending offered by this Administration. Why? Because it hasn’t worked for Europe and won’t work here. Administration has “stimulus” funds to pay for unemployment benefits extension, but wants to spend that money close to November Election to fake “progress” and rather than remove “ear marks” to gain Republican support, let people suffer and hurt the economy even more by positioning the Republicans as “bad guys”. Same tactic as used to slow military funding (encourages the enemy and discourages US and Allied troops – but political tactics make the Republicans look bad; so from Obama/Reed/Pelosi standpoint must be OK!). Our kids and grandkids will pay for this mess! Thanks to Carter, Clinton and Obama who just don’t seem to understand: Eventually you will run out of the other guy’s money. Seems there are still some who actually believe more Govt. control is good. If that’s what one wants, just vote Democrat in November and keep Pelosi in that Speaker chair for another term. Seems Nevada voters are sending a message to Reed.

    Sam on 7/2/2010 at 05:18 PM 

  7. Keynesian economics were discredited in the minds of many thanks to the first stimulus. That is killing the Dems shot at pushing for bigger government. I don’t claim to know the right answer.

    Maybe Michele Bachmann can help out our economy by abandoning the global economy? If you have not heard about this, check it out here:

    http://www.dailygoat.com/2010/07/michele-bachmann-breaks-up-with-global-economy-global-economy-secretly-relieved/

    Brian on 7/2/2010 at 05:15 PM 

  8. You fuckers are something else. I don’t see Democrats getting behind a bill to add additional weeks for the 16+ million unemployed that have exhausted their benefits.

    zxvb on 7/2/2010 at 05:08 PM 

  9. Games as Usual. Except this time the Republicans will pay dearly in November. Full of “shitoil”. . Both parties are jokes. GOP are the bigger fools in long run though. They are living like its 1980. Get with the program.

    Bob on 7/2/2010 at 04:48 PM 

  10. No one said the unemployed were buying houses, unless you’re confusing this column with a Fox And Friends transcript. Let’s say you’re unemployed and own your home, and all of sudden your unemployment benefits are cut. Zero income. You’ll probably choose to eat over paying your mortgage. More defaults on mortgages and increased blight and uncertainty from foreclosures will keep the housing market shaky for much longer. The same applies for those renting on unemployment. If landlords have to evict, that’s one less stream of revenue they have and it may force them to sell or be foreclosed upon as well, decreasing real estate prices further. It’s a shame that the news doesn’t report on stories of landlords being foreclosed upon by the bank and the renters find all their belongings in the street after getting home from work, assuming they’re lucky enough to be working right now.

    Patrick Slevin on 7/2/2010 at 04:04 PM 

  11. Unemployed, no benefits, I’m burning the American flag this weekend instead of hotdogs.

    You’ve lost this lifetime tax base. Never again will I pay taxes so you give them away to the world while my family sit’s here wondering what the hell we’re going to do…

    HoosierDONK on 7/2/2010 at 04:02 PM 

  12. Yup. All those people that were on unemployment are going to stop buying houses and we’ll experience a further housing slump.

    Oh wait. More accurately, this article doesn’t make any sense whatsoever.

    Give the republicans the spending cuts they want, and the democrats get their unemployment extension. Easy as that. Except the democrats, more than anything, don’t want the republicans to be able to claim any victories before the election.

    John B. on 7/2/2010 at 03:42 PM 

  13. I am a Republican who would like to remind the Senate and Republicans that the Medicaid, Medicare, Food Stamp and UC Benefits (extended and otherwise) have been in place, pretty much since FDR and that when DEMOCRAT PRESIDENT CLINTON left office, He left the country with a POSITIVE BALANCE OF OVER A TRILLION DOLLARS! He balanced the national budget which INCLUDED all of the services you people want to remove because of your negligent inabilities to handle money! WAIT UNTIL NOVEMBER!!!

    Bonnie on 7/2/2010 at 03:41 PM 

  14. There was a stand alone bill that was voted down by the Republicans. I’m all for keeping a balanced budget, but we aren’t using the pay go rule with the war. Brown wouldn’t support a bill that taxed 19 billion to banks.

    have you used a bank lately?? I get charged 35 bucks for not having the money in there. They don’t cover what is being charged. They just charge YOU 35 bucks because you don’t have the money. Bank fees are ridiculous.

    If there is one thing we shouldn’t have a need to offset is unemployment for those hit by 9.7% unemployment throught the country. Anytime unemployment has been above 7.2% I believe there is extended benefits. This is the first time in history this lapse has ever happened. Thanks to the republicans, who I have voted into office. This disgusts me, and I will never vote republican again.

    Will on 7/2/2010 at 03:37 PM 

  15. Make the streets look like a Greek protest this 4th weekend.
    I know it won’t happen, americans, even when faced with starvation and homelessness have no guts!

    newhitmarketing on 7/2/2010 at 03:36 PM 

  16. Have companies pay better! Start the WPA again!

    Bill on 7/2/2010 at 03:33 PM 

  17. Funny, from 2001-2008 all I heard from the left was how bad the economy was and how tough economic conditions were. Now all of a sudden those were boom years of endless plenty? Give me a break.

    Nick on 7/2/2010 at 03:22 PM 

  18. Traitorous -Trash-From – Living – Hell, to put it lightly, is probably what people in Kentucky, and Tennessee, and Louisiana are calling their so called representatives, in the congress and in the senate. Mary Landrieu recently showed the people in Louisiana that she was opposed to a tax increase upon the billion dollar oil industry that is devastating her state with loss of jobs because of the oil spill, which tax increase could have helped fund the unemployment extention for the jobless in her state. Does she have any personal investments in the oil companies, like the judge does in Louisiana , who recently overrid President Obama’s freeze on drilling until more safeguards were put in place after the massive ongoing oil spill? And those traitors to the unemployed in Tennessee, and in Kentucky, who keep voting against the extension , worrying more about a deficit that they helped put there in the first place with some of their senseless expenditures over the years. These so called representatives are living a nice comfortable life style off of your tax dollars, sipping cold tea in the white house all day long in cool air conditioned chambers, while the american people are being put out of their homes and losing their vehicles, and being shoved out on the streets, and all this is working to cause the people to want to embrace socialism, as they see capitalism fail here in the USA. People in Cuba do not want to come to the USA, and now we see why. They get free medical care. Try getting free medical care here in the USA. And it is only going to get worse. Orin Hatch has added insult to injury to the poor and needy at this time. He has insinuated that the majority that can’t find a job are probably crack heads, or beer bellied alcoholic wine heads, as he wants all those receiving benefits, if extended , to be drug tested. Why don’t he and all the congress and senate take drug test, after all, look at the job they have in making decisions that affect our nation , and we suspect some are out there in lala land on something as it is, when we see the reprobate rot for legislation that some propose and consider such as gay marriage. This country has gone to the pits, thanks to the ones that the American people have voted into the congress and senate, and now your eyes are finally being opened , and you are getting to see what they think of you after they get to Washington. They have given the tax payer the shaft. They are living comfortable life styles off of your tax money, and while doing so, making sure that they cast their vote so that you can’t get any help at all from the tax money you have paid into the system all these years when you finally need the help that you do. I’m so glad that I don’t have small children to raise at this time, for it is only going to get worse. Well did Jesus our Lord state: weep not for me, but weep for yourselves, for the day is coming that they will say blessed are the paps which never gave suck and the womb that never bare. / Those who have small children to raise in hard times always have it worse than those that don’t have such responsibility. We should not marvel about the Katrinas and the oil spills, and such that is coming to this nation. Any time a nation will legislate immorality like our nation has with the godless gay marriage thing, you can see that we have become like Sodom and Gomorrah of old, cities that God destroyed because of the freakish filth and abominable wickedness that they proudly displayed during those times. So marvel not america that your reprobate representatives have turned on you as they turn you out to the streets while they live comfortably in Washington, it is all part of the judgment coming upon this nation to punish it for its wickedness and sin. Watch in horror and disbelief daily, as you see your reps in Washington sell you down the river as they live comfortably on your hard earned tax money.

    JOSEPH G. KINGSTON JR. on 7/2/2010 at 03:15 PM 

  19. Since being unemployed, and not being able to support food and my everyday living, I have learned how to cut back on alot of things. I eat in the store pretending that I am shopping, and have learned how to make a meatloaf out of dry dogfood. Its really not that bad. Iam so disappoined in this government, very disappointed.

    stephanie perkins on 7/2/2010 at 03:14 PM 

  20. How do you think messing with healthcare in these difficult situation help. Actually the rates have increased from past 3 months.

    Jogn on 7/2/2010 at 03:10 PM 

  21. Why don’t you mention that the reason the Repubs aren’t voting for this is because this extention is added to a whole lot of “pork” spending. Can’t get one without the other, so we’ll take neither.

    Richie on 7/2/2010 at 03:07 PM 

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