Well, the lovefest is over already. In this tough time, the Lame Duck Congress and incoming replacements are having to face what will surely be a testing first 100 days - and what level of sanity, compromise and common sense occurs will determine how much gets accomplished...
In business, when you have a huge pile of crap on your desk, rather than stare at it and let it get larger, you prioritize it, and start plugging away. Eventually, it gets smaller... This week, the decision on unemployment benefit extensions is front and center. Almost a third-rail issue, the time to be tough and Just Say No finally appears to be at hand...
We're almost experts at this topic. We've been unemployed more than almost everyone in US History. We don't have an actual skill, yet we make more than the average bear come pay day. Yes, we're a Worst Case Scenario - the guy with 'people skills' and nothing else. Too good for McDonald's, too dumb for a real job. So, what's the longest we've been out of a job? Four months.. Why? Because we've done whatever it takes to go back to work, at our own detriment sometimes. Yeah, if I waited for another cushy gig to show up in six months, I might still be in South Carolina, but that's not my style...
Currently, the benefits have been extended to a mind-boggling 99 WEEKS, or damn closed to two entire years.... Short of physical limitations, no one has an excuse for being out of work that long, unless their expecting to land the same job that they had. Good Luck, you unrealistic jaggoff...
Our favorite reason for extending is the economic impact of not sending money to unemployed receipients. Yeah, every dollar of that check goes to pay bills, but at what cost? Even if every person without a job got half thier usual pay, that is about 4.5% less money in the economy. So, that's the same as when this recession started at 5% unemployment. Did we push the red button then? Nope... Also, the added cost goes towrds our debt - and the interest added to it. That doesn't happen with earned money....
Lastly, we have perhaps some good news related to why extensions might not be needed. Today's job outlook showed an additional 150,000 jobs were created, mostly from small business. Yeah, it's shopping season, but any good news is good news, right. No, the job outlook for 2011 isn't great, but continued small gains would make the 600,000 people facing loss of benefits in the coming months null and void. Unless of course, they've stopped looking....
This year has been a real eye-opener for America. The boom of the 80's and 90's are distant memories, and our 2 new cars and ovepriced McMansions are overwith... We need to learn to live on the cheap and maybe save a few bucks for once. Government needs to do the same. If we are upping the cost of the basics, then cuts from somewhere else need to happen. It's all a matter of priorities....
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1 comment:
Mike-you and I have had this conversation several times in the past. Unemployment benefits are a two edged sword; while they can provide temporary relief for those that are unemployed, there are many that use their benefit to sit at home and not look for real work. Also, many collect their benefit and still work for cash under the table. The original idea was that this was to be a temporary helping hand from the government until a person could get back on their feet, but over generations of abuse it has turned into a expected and demanded entitlement by certain "special interest groups" that support one particular political party.
So, what will be the effect of the elimination of the extra weeks of unemployment? For those who could have worked and simply refused to, for whatever reason, they will be forced to get back into the job market. I expect that we will see a uptick in the jobless numbers that will better reflect the severity of the Obama depression. For others, the loss could be the final straw for them financially and I expect we will see increases in foreclosures/repossessions and bankruptcy filings in the first half of 2011. In either case, it will a major determent for any potential economic recovery for months to come.
The simple fact is that as the Obama depression continues to drag on, our nation will be faced will the choice between draconian austerity or major and severe tax increases (or both). The end result is going to be on-going high unemployment numbers for months, if not several years to come; drastic reductions in services provided for by Federal, state and local governments; a reduction in the standard of living that will affect all social/economic classes; a reduction, if not a curtailment, of private business expansion (and in some cases continuation) and rising resentment from the American public as a whole that could make the Tea Party and town hall meeting protests look downright civil. Keep in mind, the specter of rising inflation and interest rates looms in the shadows and that has the potential of death stroke for businesses/whole industries and the general public of this country as a whole.
Mike, you have the right idea, in that we need to learn to spend less (a lot less) and save more (a lot more). The question really is, does this country have the intestinal fortitude to make the difficult decisions, choices and sacrifices that members of “the greatest generation” did or have we become too dependent on artificial affluence and personal prestige? It will be interesting to see how this unfolds and how the decisions that are made, affect the future generations of this nation to come…teg
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