11/18/2010

$319 billion in jobless benefits over last three years

So do you think that paying people $319 billion as long as they remain unemployed will cause people to be unemployed longer?

Unemployed Americans have collected $319 billion in jobless benefits over the past three years due to the federal government's unprecedented response to the Great Recession, according to a CNNMoney analysis of federal records.

The cost of such benefits will be central to the heated debate in Congress in coming weeks over whether to extend this safety net for the fifth time this year. Lawmakers must act by Nov. 30 or two million people will start losing extended benefits next month.

The federal government has already footed $109 billion of the bill, and lawmakers are super-sensitive to adding further to the deficit. But advocates are turning up the pressure to extend the deadline to file for federal benefits. . . .


UPDATE: The House proposal that Democrats limited to only one option was defeated.

House Republicans Thursday torpedoed a bill to extend benefits for the long-term unemployed, pressing their demand that the $12 billion cost of continuing the program be offset rather than adding to the deficit. . . .

In a defeat for Democrats trying to keep the program from expiring Nov. 30, the House rejected a bill to continue the program for three more months.

Lawmakers in both parties expect a compromise eventually to be reached—but not until December, after the current program expires. Without an extension, 800,000 unemployed workers will lose their benefits by Nov. 30 and two million by the end of December. A similar lapse in benefits occurred last summer as Congress struggled to break another impasse. . . .

Agreement also eluded the two parties on a plan for extended unemployment benefits. The program provides aid for up to 99 weeks to many workers who are laid off, by adding to the maximum of 26 weeks of benefits offered through most state programs.

Members of both parties say they want to extend the benefits, and a majority backed the legislation in the 258-154 vote Thursday, which included 143 Republicans voting against it and 21 in favor. The bill failed after Democratic leaders had brought it to the floor under fast-track procedures that require a two-thirds majority for passage. . . . .

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7 Comments:

Blogger Kansas Scout said...

It's nice to be a purist when you have a job. I have been unemployed for two full years as of this week. I exhausted my benefits in July. Being 60 yrs old and formerly a Construction Proj Mgr. I am up shit creek without a paddle. There are 300 applicants for every job I apply for. even McDonalds won't hire me. WTF am I supposed to do? If they can give me unemployment benefits so I don't lose my house and can pay most of my modest bills, I am for it.

11/18/2010 1:04 PM  
Blogger LB said...

Mr.Lott,

Can you do a follow up article to this one? "President Obama and the Democrats’ “stimulus” package will increase the unemployment rate. The changes they propose will also make us poorer, with fewer, less productive jobs.

Read more: http://www.foxnews.com/story/0,2933,487425,00.html#ixzz15g6uLkjl

After reviewing the unemployment figures published by the Bureau of Labor Statistics, I don't see an appreciable difference in the unemployment rate.

"But the problem is due to the chaos created by the stimulus as well as the disincentives created by higher taxes and increased regulations."

Well, this persons analysis seems to say that the Bush taxes cuts did NOTHING positive for the economy?

http://economix.blogs.nytimes.com/2010/11/18/were-the-bush-tax-cuts-good-for-growth/?partner=rss&emc=rss

I look forward to your follow up article. Please include some supporting statistics.

11/18/2010 6:34 PM  
Blogger John Lott said...

Dear LB: When the piece that you are quoting from was written, the unemployment rate was 7.7 percent. The Obama administration at that time was predicting that the unemployment rate would go up to 8 percent. Even at the end of February almost a month later, the Obama administration was predicting that the unemployment rate would average 8.1 percent for last year and fall to 7.6 percent this year. I don't really understand how you can say that there hasn't been an "appreciable difference in the unemployment rate."

If you want some updated numbers on how things have gotten worse here compared to other countries, why don't you look at this:

http://www.foxnews.com/opinion/2010/09/27/john-r-lott-jr-stimulus-economy-obama-unemployment/

As to the NY Times piece, there are two responses. How do you want to count the impact of the 911 attack? Do you really believe that people don't work harder if they get more money for working (in this case get to keep more of their money)?

11/19/2010 4:26 AM  
Blogger LB said...

Thank you for your follow up comments.
Shouldn't we be comparing ourselves to a capitalist system? Germany has a social market economy.
Although Poland is 24th in GDP, I accept the comparison. Poland’s unemployment rate was 14.2% in May 2006 while decreasing to 6.7% in Aug. 2008. As they transformed from a centrally planned economy to a primarily market-based economy, they experienced great benefits. Since the US is already a capitalist society and more mature, we cannot expect to see these kinds of gains.
I agree with your comparison to Iceland. We should have let the banking system crash too. Most of our economic issues are the results of the banking system faltering going back to the 19th Century and farther.
You posted this article, “The Change in Unemployment by Country from January 2009 to July 2010”. Starting in 2009 we can see the saving rate increased dramatically. ttp://www.bea.gov/national/nipaweb/Nipa-Frb.asp.
Coupled with the NY article, I would surmise that people haven’t been investing money in new economic ventures.
The wealth distribution is out of whack too. Right now the top 1% holds more of the wealth than they have in years. And the top 20% own 85% of the privately held wealth in this country which is a result of these tax cuts for the wealth. If we compare the numbers from the Great Depression, we will see similar numbers. As privately held wealth concentrates, the economy suffers. In addition, the top companies have more money too. Basically, both groups are hoarding money that they sucked out of the bottom 15%.
“Do you really believe that people don't work harder if they get more money for working (in this case get to keep more of their money)?” I don’t because there is a limit to how many hours you can work no matter who you are. The goal should be to create as much value you can for yourself. My friend works 60-70 hours a week driving a truck, how many hours does/can a CEO of a Fortune 1000 company work? Is it the time or the value of their time that counts?

11/19/2010 3:23 PM  
Blogger John Lott said...

Dear LB: It really doesn't matter who you compare the changes in US unemployment rates to. 25 of 30 countries faired better than we did in terms of the changes in unemployment. Almost a third of those countries actually saw a fall in unemployment over the same period that ours went up by about 2 percentage points. If you want a comparison, why not Canada or the UK?

In any case, the US is not a capitalist economy. A large percentage of our banking system is own in full or in part by the government. Part of our manufacturing system is owned by government. Most of our education system is owned by government. A large part of our mail system is owned by government. We also have probably more regulations than a large part of Europe.

The other points that you are raising are too far a field. Savings doesn't mean that money isn't invested. In fact, it is the opposite. I am not sure what the point is about wealth redistribution and how that is related to causing unemployment.

11/19/2010 7:50 PM  
Blogger LB said...

Mr. Lott, Obama didn't fire anyone. CEO of US Companies did.

Did you think that it is plausible that US companies overreacted to the crisis and fired people that they didn't need to? If they didn't fire those folks, they wouldn't be requesting unemployment payments.

Some of the more recent numbers estimate that US corporation are sitting on 1.3 trillion dollars which is being used to buy back their existing stock or acquire other companies, rather than hiring more personnel. Obviously, social responsibility is dead in these companies.

In addition, the CEOs that fired the most people made the highest compensation. It seems that they were looking out for themselves and not the greater good of the country. It's their choice.

http://www.ips-dc.org/globaleconomy

Employment in reference to wealth distribution relates to companies and individuals sitting on money. If US corporation just buy back their own stock or purchase other companies, how does that help the unemployment rate improve? If they rehire people in foreign countries, how does that help the employment rate?

Hey, we just reported the highest corporate profits ever!

http://www.nytimes.com/2010/11/24/business/economy/24econ.html?_r=1

11/23/2010 6:52 PM  
Blogger John Lott said...

Dear LB:
Boy have you wandered far afield. Obama has done severe damage to the economy by moving around a trillion plus dollars with his various stimulus packages Obama moved around the jobs associated with that spending. Huge regulations have caused companies to stop hiring people. Threatened increasing taxes on small businesses has also hurt. Obama has forced many companies to layoff workers.
Yet, you still can't deal with the point of my post here. Hopefully, you can eventually deal with the point that I raised.

11/23/2010 10:57 PM  

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