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Here is a major reason that a depression hasn’t appeared and the public is not in open revolt.

AP: 20 million-plus collect unemployment checks in ’09 A record 20 million-plus people collected unemployment benefits at some point in 2009, a year that ended with the jobless rate at 10 percent…

The slow pace of hiring will force Congress and the Obama administration in 2010 to spend as much as $70 billion to extend jobless aid for the long-term unemployed, or else let benefits – which were extended several times in 2009 – expire for millions of people.

“Fewer people are getting fired, but nobody is finding a job,” said Dan Greenhaus, chief economic strategist at Miller Tabak.

Thursday’s report illustrates the two different trends: first-time jobless claims are falling as layoffs ease, but the total number of people collecting unemployment checks is still rising.

More than 10.1 million people collected jobless benefits in the week of Dec. 12, the latest data available. That’s up by about 200,000 compared with the previous week. That figure includes 5.3 million people receiving the 26 weeks of aid customarily provided by the states, and 4.8 million people that have shifted to the extended benefit programs enacted by Congress over the past two years and paid for by the federal government. Unemployment insurance averages about $300 per week.

But the extensions are set to expire in February. That could mean as many as 1 million people would run out of unemployment aid in March, according to the National Employment Law Project, a nonprofit group…

Most pundits and the usual Street shills and their confederates in the media ignored the dire news about so many people on unemployment benefits so they could trumpet the modest decline in jobless claims.

Financial and economic history shows that the lower rungs on the chain experience hardship first, like with subprime mortgages. Then there is an inexorable march up the food chain.

However, in this crisis, the welfare checks, food stamps and unemployment benefits are still rolling so there has not been as much impact, including political angst from this segment.

The people experiencing the biggest impact are the middle and upper middle (merchant) classes. This will devastate the Treasury. As entitlement and safety net spending soars, the minority of citizens that pay taxes and foot the bills for the majority of the populace are being squeezed. So taxes decline.

In 2008, and estimated 46.7% of US citizens did NOT pay federal taxes. Given the sharp increase in unemployment and the destruction of small and media businesses, over 50% of the US probably will pay no federal income taxes in 2009.

From the above AP story: The drain on federal and state finances could force Congress to consider raising the federal unemployment insurance tax, which is currently 0.8 percent on the first $7,000 of wages, or making other changes.

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Source:
20 million-plus collect unemployment checks in ’09
CHRISTOPHER S. RUGABER
AP, Dec 31, 3:10 PM

http://apnews.myway.com/article/20091231/D9CUGAHG2.html

Category: Employment, Think Tank

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

4 Responses to “Record Unemployment”

  1. davefromcarolina says:

    Let me get this clear–those shiftless lower-income people who are out of work are getting a free ride via unemployment insurance, while virtuous middle-income people who have jobs will be shafted because taxes to pay for unemployment insurance must rise? If so, you get the first Barbara Bush Katrina Award of 2010 for pointing out how lucky those lower-income people are to be out of work.

  2. FrancoisT says:

    davefromcarolina;

    You’ll go far; now, the sooner you leave, the better it’ll be.

    Just make a little effort to educate yourself on the endless “joys” of long-term unemployment. What I can tell you is that just in terms of health effects, (my line of work) it can turn ugly.

    Also, just have a peek at how much UC benefits are in most states; it ain’t Goldman Sachs bonus. Compare the amount to your own budget and tell me how great a life you could have with that kind of money.

    Oh! And what make you believe you’ll never end up in that situation yourself?

  3. Pete Murphy says:

    Unemployment, both in the U.S. and the world as a whole, marches ever higher because the field of economics doesn’t account for the relationship between population density and per capita consumption.

    Following the beating the field of economics took over the seeming failure of Malthus’ theory, economists adamantly refuse to ever again consider the effects of population growth. If they did, they might come to understand that once an optimum population density is breached, further over-crowding begins to erode per capita consumption and, consequently, per capita employment.

    And these effects of an excessive population density are actually imported when a nation like the U.S. attempts to trade freely with other nations much more densely populated – nations like China, Japan, Germany, Korea and a host of others. The result is an automatic trade deficit and loss of jobs – tantamount to economic suicide.

    Using 2006 data, an in-depth analysis reveals that, of our top twenty per capita trade deficits in manufactured goods (the trade deficit divided by the population of the country in question), eighteen are with nations much more densely populated than our own. Even more revealing, if the nations of the world are divided equally around the median population density, the U.S. had a trade surplus in manufactured goods of $17 billion with the half of nations below the median population density. With the half above the median, we had a $480 billion deficit!

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