Don’t let anyone tell you that folks collecting unemployment insurance are just sitting home collecting a check. Recipients have to prove they are job-hunting as part of receiving benefits. And don’t believe the claims that an extension of benefits now would be unprecedented in some way.
The last time the nation’s unemployment rate was this high, back in the early 1980s, President Ronald Reagan saw to it that checks kept coming to the jobless back then for three years, until the unemployment rate came back to 7.2 percent.
So when conservatives like Judd Gregg insinuate extended benefits now would constitute creeping socialism, no “we’re not Europe,” to use Gregg’s own words. We just have to be as good as we were during the Reagan administration. Lastly, don’t buy the arguments that we just can’t afford an extension of benefits. The amount that an extension would add to the federal budget deficit is a small fraction of the $700 billion pricetag hanging off those tax cuts for the rich that Republicans long for.
Saturday’s votes blocking an extension of tax cuts for 98 percent of taxpayers only proved whose side Republicans are on. They are holding middle-class tax cuts hostage until they get the cuts they crave for the wealthiest 2 percent. The GOP clearly is in the corner for the rich; fair enough, that’s its right (no pun intended).
The secret of unemployment benefits, is, however, that they help the wealthy at least as much as the jobless. Unemployment insurance helps the rich stay rich.
It’s true. After all, how do the rich stay rich? And get richer? Mostly from the rest of us buying stuff from them.
Consumer spending accounts for about 70 percent of the nation’s economic activity.
Putting a little money in the hands of the unemployed helps put those dollars into the economy, and ultimately into the hands of wealthy business owners.
That’s not a liberal or socialist notion, that comes straight out the mouth of Mark Zandi. As chief economist at Moody’s Analytics, Zandi is himself wealthy, and as a top Wall Street banker, his employment is in service of helping the rich become more so.
“No form of the fiscal stimulus has proved more effective during the past two years than emergency [unemployment] benefits, providing a bang for the buck of 1.61, that is, for every $1 in [unemployment] benefits, GDP one year later is increased by an estimated $1.61,” he told Congress earlier this year. Oh, and by the way, Zandi was a top adviser to Republican John McCain’s 2008 presidential campaign.
The unemployed don’t hoard their checks as some might have you believe. They spend them, Zandi says,
This was particularly important during the depths of the recession when consumers had aggressively cut spending. While consumer spending has since notably improved, it remains fragile and would likely weaken again if emergency [employment] benefits are not extended. The recovery would struggle to evolve into an expansion as anticipated.
Consumers’ dour moods reinforce this concern. While surveys of consumer confidence show improvement over the past year, they are not much higher today than in the depths of the past recent recessions. If large numbers of unemployed workers begin running out of [unemployment] benefits this spring and summer, consumer sentiment could sink further. Attitudes would sour not only among the unemployed but also among their relatives, friends and neighbors, as they worry more about their own situations.
Did you get that last idea, Republicans? Zandi is saying that the wealth of the rich could well be in jeopardy without extended benefits. That should be a good GOP motivator.
So to the Republicans, I suggest you hightail it down to the House or Senate floor and vote for those extended benefits. Close your eyes if you have to and just imagine the sounds of those cash registers belonging to your rich friends.
Scott Nance has covered Congress and the federal government for more than a decade. Capitol Idea is his regular column from Washington. This article was first published as Why Republicans Should Relax and Learn to Love Unemployment Benefits on Blogcritics.