On today's Diane Rehm Show there was a discussion of benefits for the long-term unemployed. In reaching a budget deal to prevent yet another government shutdown, Congress (read, House Republicans) opposed an extension of those jobless benefits. The shit will hit the fan for 1.3 million Americans three days after Christmas. In the first six months of 2014, an additional 1.9 million Americans will see their benefits disappear. There are 4.1 million long-term unemployed altogether, meaning those people have been out of work 27 weeks or longer.
There are two arguments for continuing jobless benefits, a moral argument and an economic argument. The moral argument is easy to make, and can be stated as a Moses-like 11th Commandment.
Thou shalt not fuck other humans up the ass against their wishes, even when they are strangers to you.
I note only in passing that the Earth would be a far more pleasant place to live if all humans everywhere adhered to this new Commandment.
But humans often get very confused about moral questions. For example, Rand Paul is very confused.
The economic effect of cutting off this money hasn’t gotten much notice because the issue tends to be viewed through a moral and political lens.
That’s how Republican Senator Rand Paul of Kentucky framed it when he suggested on Dec. 8 on Fox News that extending emergency benefits would be “a disservice” to the unemployed because they encourage dependency.
But ending emergency aid should also be considered through a fiscal lens, because it would further dampen economic growth in an already weak recovery.
See what I mean? Rand "suggests" that by providing mere subsistence to people we are actually hurting them.
Total fucking confusion. If Senator Paul is so worried about freeloaders, he should look in a mirror. After all, Rand is a member of Congress.
The other argument for continuing benefits is economic, and pertains to growth and GDP. Here we find even more confusion than with the moral argument.
As usual, the Republican rationale for fucking these people up the ass is the program's cost, which is estimated to be $25 billion if jobless benefits were fully extended through 2014.
At this point, it would be appropriate to list each and every industry (and corporation within) which benefits from government handouts, subsidies, tax breaks, etc. exceeding $25 billion, but there is not nearly enough time to do so in one short post.
Anyway, here's the economic growth argument.
How much would growth suffer? According to the U.S. Department of Labor, extending federal benefits through 2014 would cost about $25 billion. The actual economic impact of cutting them off would be larger. That’s because the unemployed reliably spend that money, creating a multiplier effect in the economy. Mark Zandi, chief economist at Moody’s Analytics, estimates that every dollar of unemployment benefits generates about $1.55 in economic activity. By that measure, ending the payments would cost about $39 billion in spending next year.
Don't you love the phrase economic activity? I know I do. Eating? That's an economic activity. Maintaining a roof over one's head? That's an economic activity. And so on.
The economic blow would be worse than just the lost spending from those 1.3 million people now drawing federal unemployment checks. Those who lose jobs and exhaust their regular benefits over the course of the next year wouldn’t have the federal program as a backup. A Dec. 5 report from the White House Council of Economic Advisers and the Labor Department estimated that an additional 3.6 million people stand to lose access to federal benefits next year, meaning the cost to the economy would be much larger than $39 billion.
The Congressional Budget Office recently took a stab at measuring the economic effects of continuing emergency benefits through 2014, concluding it “would increase inflation-adjusted GDP by 0.2 percent and increase full-time-equivalent employment by 0.2 million in the fourth quarter of 2014.”
If you use Zandi’s multiplier, the GDP increase would be more like 0.3 percent. So letting emergency benefits expire would be as much a self-inflicted blow to the recovery as the shutdown was—worse, in fact, since the shutdown mostly postponed demand until federal workers were paid, while the demand lost from ending benefits likely won’t reappear.
In the past I have repeatedly asked questions like what's an economy for? or what's economic growth for?
This would be good time for you to review my recent post A Note On Economic Growth. If one fixates on economic growth (as measured by GDP) without also acknowledging that only a small percentage of Americans benefit from that growth, as the data have indicated for over 30 years now, then the economic growth argument has no force (see the 2011 Census data below).
To make a long story short, the economic argument must be subsumed under the moral argument, or we are left wondering what the economy is for. The economy only exists to benefit all the people living within it. Otherwise, you've got something else, and that's not a good thing, and the people running it (who are obviously benefiting from it) are fooling themselves and fooling you, probably in equal measure.
We might call this arrangement a kleptocracy. There is no agreed-upon term for a large liberalized political economy which has failed. The crucial point is that nobody who is powerful or influential is willing to admit that failure. Such an admission would put them in a bad light. Doing so goes against grain. Humans don't work that way.
If the economic loss equals or exceeds $39 billion dollars if long-term jobless benefits are terminated, and if most of that potential "growth" is actually preventing millions of people's lives from falling apart completely, then who gives a shit about GDP? Which is more important? Millions of people eating everyday? Or a potential loss of GDP?
Worshiping GDP for its own sake, which is now what many humans routinely do, could also be construed as falling under the False Idols clause of the actual Ten Commandments, if Progress is the goal.
I mean, even that prick Lloyd Blankfein, head of Goldman Sachs, said—
This country does a great job of creating wealth, but not a great job of distributing it.
The "economy" has failed the long-term unemployed. It has failed lots of people.
The problem is that few Americans in the upper half of our society seem to care that the other half—146.4 million people, (48%) to be precise—are living within 200% of the poverty line [Census Bureau, 2011].
So what do some confused people do? Blame the victims! Here's what's happening in the "economy".
The wealth of American households hit a nominal record of $77.3 trillion in the third quarter, according to data released this week by the Federal Reserve. The third-quarter household wealth number wasn’t a record on an inflation-adjusted basis but given the stock market’s rally since Sept. 30, it’s almost certainly at a record now...
Household wealth is at a record high?You know what else is at a record — at least until very recently — The Dow Jones Industrial Average? That's one big reason why the data says Americans are richer. Oh, and by the way, the wealthiest 10% of U.S. households own about 80% of stocks.
Do you see now how confused humans really are? It's disgusting.
And this disgusting bullshit just goes on and on and on... Well, anyway, that's the view from outside Flatland.
The Rand Paul about doing a 'disservice' to the unemployed reminded me of the Inquisition. The Inquisitors believed they were saving people's souls, so torture was completely justified in their eyes. People even today find a way to justify it:
http://catholiceducation.org/articles/history/world/wh0075.html
"The Spanish people loved their Inquisition."
When one digs under the surface, though, it's really about power maintenance - keeping the power for those who already have it.
Posted by: Jim | 12/18/2013 at 02:39 PM