Dean Baker: Republicans- A Party of Unemployment

[depakid]

From now until 2 November, the Republican party will be the party of unemployment. The logic is straightforward: the more people who are unemployed on election day, the better the prospects for Republicans in the fall election. They expect, with good cause, that voters will hold the Democrats responsible for the state of the economy. Therefore, anything that the Republicans can do to make the economy worse between now and then will help their election prospects.

While it may be bad taste to accuse a major national political party of deliberately wanting to throw people out of jobs, there is no other plausible explanation for the Republicans' behaviour. They have balked at supporting nearly every bill that had any serious hope of creating or keeping jobs, most recently filibustering on bills that provided aid to state and local governments and extending unemployment benefits. The result of the Republicans' actions, unless they are reversed quickly, is that hundreds of thousands more workers will be thrown out of work by the mid-terms.

The story is straightforward. Nearly every state and local government across the country is looking at large budget shortfalls for their 2011 fiscal years, most of which begin on 1 July 2010. Since they are generally required by state constitutions or local charters to balance their budgets, they will have no choice except to raise taxes and/or make large cutbacks and lay off workers to bring spending and revenue into line.

State and local governments have cut their workforce by an average of 65,000 a month over the last three months. Without substantial aid from the federal government, this pace is likely to accelerate. The Republican agenda in blocking aid to the states may add another 300,000 people to the unemployment rolls by early November.

The blocking of extended unemployment benefits promises similar dividends. As Paul Krugman rightly notes this week, unemployment benefits are not just about providing income support to those who are out of work, they also provide a boost to the economy. Since unemployed workers generally have little other than their benefits to support themselves, this is money that will almost immediately be spent. The benefits paid to workers are income to food stores and other retail outlets.

Unemployment insurance provides the sort of boost to demand that the economy desperately needs. That is why neutral parties such as the congressional budget office or economist Mark Zandi, a top adviser to John McCain's presidential bid, always list unemployment benefits as one of the best forms of stimulus.

More: http://www.commondreams.org/view/2010/07/06-2

[jtuck004]

1. Thanks for posting this. He is speaking to the choir, however. What needs

needs to happen is a BIG, BIG plan presented to Congress, suspend the Catfood Commission, half a dozen television speeches by O to tell people there is a plan that will put 10 million people back to work, a couple million in school learning how to create factories to build silicon, Lithium batteries for cars, get involved in finance - make it clear that we are fighting a Depression, every single Senator and Representative in the D party talking it up, talking heads on tv...give no one air time to disagree without making sure it is answered with a suggestion that they are trying to hurt us. 'Cause they are.

And if the Republicans are stupid enough to stonewall it, it will make it so VERY public. We would have to be committed to passing it, so much so we resort to changing the rules if needed, (though I would bet some Repubs would cross - otherwise they would look like enemies). If it passes it needs to be a good enough plan to inject perhaps 4 Trillion dollars, and at least a trillion immediately.

On the other hand, I don't see it happening.

What I am afraid of is either no big idea, or some stupid tax rebate thing that attempts to buy votes and doesn't do anything.

And the thing that makes me afraid is that what the Repubs are doing is working.