Associated Press
When it comes to the ongoing fiscal talks in Washington, some high-profile policies -- Bush-era tax rates and the sequester -- tend to get the most attention. But as the end of the year approaches, these measures aren't the only important policies with looming deadlines.
As Jamelle Bouie explained this week, the unemployment insurance extension, which President Obama included in his 2010 deal with Congress, is also poised to end in January. Bouie added, "If it does, more than 2 million Americans will lose their federal jobless benefits, a key lifeline in an economy that's still trudging towards recovery."
It's hard to overstate the economic impact of the policy.
Fully extending the current level of jobless benefits provided by states and the federal government through next year would add the equivalent of 300,000 jobs by slightly boosting spending and growth in 2013, the nonpartisan Congressional Budget Office estimated in a report released Wednesday. [...]
Extending the current slate of extended federal jobless benefits would cost roughly $30 billion and increase gross domestic product by 0.2% in the fourth quarter of 2013, according to estimates from CBO, the independent budget arm of Congress. Because the unemployment insurance program puts money in the pockets of people likely to spend it, the subsequent boost in demand for goods and services would likely create about 300,000 full-time jobs, according to the report.
The full CBO report is online here (pdf).
The right routinely opposes extended jobless aid, but it matters a great deal. Not only do the benefits help keep struggling families from slipping into poverty, but the assistance is inherently stimulative -- in terms of bang for the buck, unemployment aid is one of the best and most effective forms of government investments boosting the overall economy because those who receive the benefits don't stick it in a mutual fund; they put the money right back into the economy, buying goods and services.
If Democrats haven't included this in the fiscal talks, they're making a mistake.
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why are you discusing jobless benefits ? i know why becasue of all the layoffs due to come once obamacare / regulations come into law . im sure food stamps will still continue to rise in number . you voted for it so you will also live with it .
Thank you for the daily demonstration of how stupid ignorance has to be to pass the IQ test low enough to be one of you scum. Go pee on the fire hydrants somewhere else, little boy, mommy wants the computer back.
lawbaker - do you have a clue about what the article is talking about? Cause your response certainly shows that you didn't. And until we come out of this yes there will be those that need food-stamps, so deal with it!
PS - Re lawbaker; Never try to teach a pig how to sing. You will only have wasted your time, and it just irritates the pig. The Taliban/Teaparty adamantly oppose allowing facts to influence their thinking
I get SO tired of this complaining, complaining, complaining about how Obamacare is pinching our poor embattled employers so they have to take the painful step of informing their loyal staff that some of them have to be cut. Not their fault. No, no--blame it on the Liberals.
What's the real story? They've been getting away with pocketing the extra profit while hiring people without providing health insurance or paying those employees enough to buy it for themselves. ("Not my problem. They don't need no stinkin' health insurance. They got the ER!") Meanwhile, after a hard day at work, they cruise out to their McMansion in the 'burbs and crank up the Bose in the dash of the Benz. Twenty years ago they couldn't afford the car and the house and all the trimmings of affluence, but deregulation and the right people turning a blind eye opened the door for this class of nouveau riche. And they think it's all their hard work that earned this privilege. Sure thing.
Well, I've been shoulder-to-shoulder with people on that side of the line, lived and worked among them, and choose to live a simpler, more genuine, life now. With very few exceptions, I've noticed they're there because of something that was almost accidental. Rich daddy, straight nose and teeth, school connections. Whatever it is that gave them a boost, the sneering attitude toward the less fortunate is unbecoming, to put it mildly. There, but for the grace of Whomever, go thee.
60% of the GDP is typically consumer spending.
Now let's see. Who's more likely to spend? Someone who's unemployed and needs to pay the bills, or buy food, or some guy (or woman) who's sitting around wondering whether to put their next million in the Cayman Islands, or in the stock market so they can trade that stock off in a week, or two?
I don't see how the boost in demand for goods and services would likely
create about 300,000 full-time jobs. How many goods and services can one buy on
a bare minimum unemployment check? I understand that the money will be moved
immediately back into the economy, but I don't see it creating the kind of
demand that results in new hires. People on unemployment pay the rent and
electric bill and budget the rest as if their lives depend on it.
Nor do I see 300,000 full-time jobs offsetting $30 billion.
By all means, extend the current level of jobless benefits--because it's the
right thing to do--but don't try to sell it as stimulus.
Oh, I don't know. How about food? Rent/mortgage? Heat? Auto payment, or auto insurance so you can keep driving to look for work, or gasoline? Maybe a land-line phone, so you can call about jobs or have prospective employers call you?
*ALL* such expenditures are more stimulatory than *NO* such expenditures.
And by the way, we wouldn't want your children to eat or have clothes or a place to live just because someone laid you off at age 50 three years ago and it's tough for us 50+ folks to find new jobs.
Sheesh. We support troops in AF at roughly $1million per soldier per year. At that rate, $30 billion only supports 30,000 troops. I call 300,000 a true bargain, and the humane thing to do.
And I'm absolutely de-lighted (!!!) when my tax dollars are used this way instead of supporting Exxon-Mobil et al. And I actually pay real taxes, unlike many a corporate free-loader.
Since this makes economic sense and does nothing for their plutocratic patrons (except create consumers for their products...duh), the Republicans will be against it.
So let me see, we are going to raise taxes to increase revenue. But we are going to take that money and send it out to extend unemployment in which case hoping that money comes back into the economy. At which point do we get to paying off our debt or reforming all of the tax codes and programs that are drastically in need of reform. Maybe if we had more manufacturing of products in the US and more services that stayed in the US we could increase job growth and we would have less unemployment, in which case we could have more revenue going towards our debt.
I do know that I live paycheck to paycheck right now and if I have less money coming in then I must tighten up and spend less. I can't put money out that I don't have coming in. Now I'm just an average nobody without any economic degree, but i do believe that if money coming in is less then money going out then the business goes under. How is our country any different?
If you are genuinely interested in answers to your questions, answers are available and not really difficult to understand.
But we have to wade through some background material before we can address your one stated question.
Around twelve years ago, our government cut taxes, quite a bit, and started two wars. Wars aren't cheap. About four years ago, the actions of a few unscrupulous bankers bent on making millions for themselves with no regard for anyone else, not even the companies they worked for, culminated in the deepest recession we have ever experienced. The Great Depression is the only financial setback we've ever had that was worse.
So, 2009, after seven years of spending lots (wars are expensive) and having very little income (big tax cuts, remember) we found ourselves in a hole that was getting bigger and because millions had lost their jobs, the country's income (payroll and income taxes) was shrinking.
You began by saying, "...we are going to raise taxes...". That's true, but not accurate. Progressives want to keep income tax rates on EVERYBODY the same for the first $250,000 of income. If you don't make $250,001, your tax rate won't change. If you make more than 250K, then that income ABOVE 250K will be taxed at a higher rate, BUT NOT THE FIRST 250K.
Why do progressives want to pick on people making more than 250K? Well, you might say it's only fair. A huge part of why they are able to be so wealthy is they enjoy the policies and protection of their country, the good ol' US of A.
But think about this; WE owe a bundle. If we're going to pay our debts the money is going to have to come from somewhere. It CAN'T come from the working middle class, we're strapped. Because of a lack of federal oversight on banks, we owe more on our houses than they're worth.
Luckily, largely due to Mr. Obama, and in spite of a conscious effort to hamstring the recovery just to make him look bad, the stock exchange is in pretty good shape. Bankers and investors have more money now than when this all started. If their tax rate goes up, they take home only ten million instead of eleven million.
If my tax rate goes up, that's two house payments I have to find somewhere else. or I don't get the kid's teeth fixed. or I drive my twelve year old beater another three years. or my kid doesn't go to college...
But to answer your question, 'how does our country differ from a company?' A company is formed in the hopes of making a profit. Our country was formed in defiance of the "Divine Right" of kings. The American colonials felt that taxation without representation was a not good thing. They felt that all men are created equal. They valued the idea of 'one man one vote.' They rebelled against the rule of the many by the privileged few.
...and, companies don't print their own money, but that is another explanation...
So that I am clear, at what point does unemployment get cut off. This can't go on indefinitely. I think there needs to be clear rules of the road drafted on this if we are going to continue extending unemployment. Of course, it was (is) needed; however, it is hard to take back something that has become the norm. We can't extend until everyone finds a job, right? Continuing to extend will make some leary...Anybody agree?
"Anybody agree"?
I doubt it.
The vast majority of those unemployed do not want to remain unemployed. Unemployment is, usually about 1/2 to 2/3s of one's previous pay. As there's usually a maximum amount receivable it could, depending on how much one had been earning, even less. UEI is also subject to state income taxes, I don't know about Federal. That right there means that anyone on UEI has already taken a steep cut in income. Yet another reason many on UEI want a job.
It's finding a job that's difficult. While the national UE rate is below 8%, there are still quite a few places where it's still higher. Even should one want to relocate from somewhere where the UE rate is still high to someplace where it's lower, it's going to cost money to relocate. If your only income is your UEI how are you going to get enough extra money together to afford moving?
Then there is the skills mismatch. How does someone with 20+ years experience as a machinist transfer that experience into a different job? Assuming, of course, that the applicant isn't rejected immediately as over-qualified. Or rejected because of age - FSM help you if you're over 50 and lose your job!
Enough?
I am one of the faceless unemployed. It has been less than a year but all I have is the federal benefits. I was fully employed for my entire adult life and have a graduate degree. I am also 62 and apparently untouchable in the current sea of all the unemployed. So every week I search for a job and subsist on the few dollars of unemployment money that my taxes have paid for all these years. The fiscal cliff for me means poverty and public aid. I am not a by-product of the Obama administration but rather, a by-product of a culture that wants cheaper, younger disposable younger workers. Those who are so clearly filled with disgust by those of us on unemployment need to take a walk in our shoes. I dare you.
Can you take early Social Security without hurting yourself in the long run?
I hear you, copper-eagle2. You're not alone, although it probably seems like you're alone in this. And I'm not sure which part of that statement is worse--the number of people suffering or the isolation and alienation they feel.
But I think it's important for everyone to pause for a moment and realize that security is an illusion. It's probably a good thing that none of us can see the future, but the reality is that some number of people are going to think they've got it made, only to have an accident, illness, downturn or whatever turn their lives upside down. I mean, who would have thought on September 10, 2001, that it could be dangerous to be sitting at your desk in the World Trade Center the next morning? And then wham, it's all changed.
I haven't been in your shoes. I left a lucrative job in 2006 to pursue another opportunity, which didn't turn out to be what I'd hoped. Afterwards, I decided not to return to the corporate hamster wheel but to scale back and live on savings. It's not all a bed of roses, but it's my choice. I ache for people like you who've been kicked to the side of the road at a time in life when you thought you'd be looking forward to the rewards of a long career. I'm sure it's a bitter pill.
I just don't know how you convince the people who are working, with health insurance provided, that they,too, could fall through the looking glass tomorrow and find themselves in an alien world. For a multitude of reasons, I blame this greediness (needing more and more and more, never enough, stepping on bodies if you have to) for the crash of the middle class and the subsequent misery.
JL, they called SSI a bad idea and wanted the program turned over to stock brokers even as their 401s were taking a beating from the crash of Bush. We are obviously not on Vulcan where logic rules the day!
To MANGST98: You wrote a very thoughtful summary of the past twelve years. It's astonishing that Republicans across the spectrum never mention the unfunded war in Iraq and Afghanistan, nor the nation-building costs of the aftermath. The wars-- $4 trillion, on the books. The cleanup? Another $4-5 trillion--and NOT included in the budget that Americans see. Yet Republicans continue to inflate President Obama's share of the debt and deficit and claim that the only way to fight the "Spender President" is to cut entitlements. The fringe on the far right claim they are fighting against Socialism and Fascism as well. They say the growing divide between the rich and poor is attributable mainly to the rise in socialistic programs that America cannot afford. They blame the "masses" and their entitlement attitude for the "big bundle" we owe. Some economists see it differently. PLEASE READ about the past 30 years of special treatment for the wealthy-- AND TAKE THIS UP WITH your CONGRESSMEN AND CONGRESSWOMEN who, quite frankly, may not know these facts about what else has crippled our economy and our society besides lazy people and progressive liberals. At least they will learn that tax breaks for the wealthy has NOT created the growth in jobs that Republicans chant over and over again.
Wealth Imbalance Is Hurting the Future of Our Economy
Friday, 19 Oct 2012 07:42 AM
By Barry Elias
When more than one-third of a nation’s wealth is owned by 1 percent of the population, an economy suffers. This is the case with the United States. According to a study performed by the University of California, Santa Cruz, the top 1 percent of U.S. households owned 35.4 percent of all net worth in 2010. This was up 50 percent since 1979 when their share was 20.5 percent.
From 1980 to 2007, the share of income for the top 1 percent (including capital gains) more than doubled, from 10 percent to 23.5 percent, while their share of taxes rose slightly more than twofold, from 19 percent to 40 percent. Following the financial implosion, their share of income and taxes fell to 18.2 percent and 36.7 percent, respectively. These data are a compilation from The World Top Income Database and The Tax Foundation.
This extraordinary wealth accumulation has eroded the economic and financial infrastructure of the United States. During this period, the economic multiplier (monetary velocity) fell more than 50 percent, according to the Federal Reserve Board. This means each dollar spent generated 50 percent less additional income.
This dynamic is a result of inefficient resource allocation. In general, wealthy households consume a smaller proportion of their income, and their investment portfolio is weighted more heavily toward financial assets, not long-term business ventures. Financial assets are primarily zero-sum, speculative transactions that tend toward wealth transfer, not wealth creation. (It is) Direct entrepreneurial investment (that) tends to increase employment and income more effectively and efficiently.
In a recent presidential debate, GOP presidential nominee Mitt Romney claimed that he could increase economic growth, help the poor and middle class and maintain the share of taxes paid by the top 5 percent of households at approximately 60 percent. To accomplish this, he might need to consider increasing the share of taxes paid by the top 1 percent, given their extraordinary wealth accumulation over the past 30 years.
© 2012 Moneynews. All rights reserved.
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