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Good legislation languishes, bad legislation sails through

I've forgotten to mention that while the Senate failed to pass an extension of unemployment insurance last night, it did manage to extend the new homebuyer's tax credit. That's the $8,000 payoff for any first-time homebuyer who buys a place now versus a year from now.

Speaking as someone who was eligible for the credit last year, it's a really dumb program. The government doesn't need to be subsidizing my home purchases. I bought because the market was low, and mainly worried that the frenzy to qualify for the credit would push the market higher than $8,000 above the price it would be at when the credit expired. When I get the check, I'll put the money in the bank. No net stimulus.

Meanwhile, jobless benefits actually go to people who will spend the money immediately, and who need the help. But they were controversial, while the homebuyer's tax credit passed unanimously. The homebuyer's tax credit, which cost $140 million, as opposed to the $30 billion for the unemployment benefits, was offset through manipulating a fee in the Department of Homeland Security's travel promotion program and saying that bad check penalties applied to electronic checks, too. But it's still a strange, regressive program, and its passage is an embarrassing contrast with unemployment insurance's failure.

By Ezra Klein  |  July 1, 2010; 6:06 PM ET
 
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Comments

"I've forgotten to mention that while the Senate failed to pass an extension of unemployment insurance last night, it did manage to extend the new homebuyer's tax credit. That's the $8,000 payoff for any first-time homebuyer who buys a place now versus a year from now. Speaking as someone who was eligible for the credit last year, it's a really dumb program."

Agreed, it is a dumb policy.

Technically, it just helps people who bought before 4/30 with more breathing room before the closing deadline. It doesn't help any new buyers going forward. From the cited article:

"The fix could help as many as 180,000 people who signed contracts to buy homes earlier this year, but then faced delays in closing the sale."

Posted by: justin84 | July 1, 2010 6:44 PM | Report abuse

Subsidizing people who have enough money to buy a house while not providing unemployment coverage to the long term unemployed shows how skewed the priorities of the repiglicans are.

Posted by: srw3 | July 1, 2010 7:01 PM | Report abuse

"Technically, it just helps people who bought before 4/30 with more breathing room before the closing deadline. It doesn't help any new buyers going forward."

OK. If it won't drive a single additional new decision to buy, but is simply a retroactive give-away, then it is even MORE stupid.

Posted by: Patrick_M | July 1, 2010 7:15 PM | Report abuse

Yes, why DIDN'T those Republican bastards agree to giving away TWICE as much to unemployed?! We can just print more money, right? Today, Speaker of the House, Hon. Nancy Pelosi actually said with a straight face: Unemployment Checks are the "Fastest Way" to Create Jobs. LOL!!!

Posted by: JakeD2 | July 1, 2010 7:25 PM | Report abuse

Passing the homebuyer tax credit extension while not passing the unemployment benefit extension may be dumb but the tax credit isn't necessary dumb. Unfair but not dumb. It's probably what they could get the votes to move the bill.

The homebuyer tax credit keeps people employed in construction and financial services, helps work off the overhang in housing inventory, lets the banks move reos, keeps some small homebuilders afloat, and even helps the retail sector (think Home Depot, furniture stores). OTOH, the unemployment benefits extension can be viewed as a giveaway. The powers that be should have tied in extended unemployment benefits to job training beginning last year. This would have given extended unemployment benefits and COBRA subsidies the patina of benefits that folks would have to put in some effort to receive rather than programs resembling entitlements.

Posted by: tuber | July 1, 2010 7:57 PM | Report abuse

I agree with tuber. While Congress's priorities might be out of order here, it doesn't make the homebuyer tax credit dumb. It was purposed to boost a sagging housing industry, a problem that has yet to be entirely rectified. Obviously, there are more pressing issues, unemployment chief among them, but I for one am happy that something's getting done in DC.

Posted by: dmalato2 | July 1, 2010 8:57 PM | Report abuse

"The homebuyer tax credit keeps people employed in construction and financial services, helps work off the overhang in housing inventory, lets the banks move reos, keeps some small homebuilders afloat, and even helps the retail sector (think Home Depot, furniture stores)."

If (as justin84 has explained) the extension of the tax credit will only benefit transactions that are still closing, and it will not stimulate even one new sale, it will do none of those things.


"OTOH, the unemployment benefits extension can be viewed as a giveaway. The powers that be should have tied in extended unemployment benefits to job training beginning last year. This would have given extended unemployment benefits and COBRA subsidies the patina of benefits that folks would have to put in some effort to receive rather than programs resembling entitlements."


An what are the vast numbers of unfilled jobs that we should be paying to train people to do?

Working people pay taxes into the system of unemployment insurance in the expectation that they will be able to collect insurance benefits if and when they lose their employment due to circumstances beyond their control. Outside the Republican party (+ Ben Nelson) UI is not looked upon as a "give-away" program.

Posted by: Patrick_M | July 1, 2010 9:04 PM | Report abuse

Do away with the homebuyers credit and the extension of jobless benefits. A person who can't find a job in two years isn't trying. I see help wanted signs at businesses all the time. (Going to 3 places a week to get them to sign a paper that you applied there so the checks will keep coming is not looking for a job.) If he is too good to flip burgers, let him starve. We can't afford to pay people not to work for years. Where does it stop? Five years? Ten years? A lifetime?

Posted by: groovercg | July 1, 2010 10:08 PM | Report abuse

What the Republican Senators do not understand at all, is that there are millions of registered Republicans voters, who through no fault of their own, are now unemployed. For the Republican Senators to continue to show, week after week, no mercy, no sympathy, neither empathy, nor consideration to the plight of members of their own voting base, who are barely surviving on the $450.00 a week they receive in employment insurance is unforgivable and now diabolical. I am so absolutely disgusted with my own Republican Party, that for the first time in my life, I would not only vote for a Democrat replacement Senator this fall, I would vote straight ticket Democrat all the way and call it a day!
The deficit of an unemployed household is horrifying and I can assure you heartless Republicans in Congress that it is much more terrifying to the unemployed then the National deficit is to you. Tell me, how can a family of five survive on $450.00 and now nothing thanks to you? How can we go to the grocery store and get a week’s worth of food, plus fill the gas tank up to go job hunting, take the kids to school, take one child to a doctor, that we now pay for in cash since we lost our health issuance, get the prescription filled, buy dog food and set aside the left over pennies for rent, utilities, car repairs, braces payments, etc?
My family has never asked for a hand out. For three months of last year I went to a food bank and stood in line for five hours to get a box of random canned goods, and still have not thought of applying for food stamps! To think we used to hold Republican precinct meetings in our home. What home now, the banks home? I have worked tirelessly on multiple Republican campaigns and for what, abandonment, disgrace and disregard? When you Republicans voted No the last three consecutive times to not extend unemployment benefits, you have taken the food right out of my three children's mouth. There is nowhere for us to cut back. I am a fiscal conservative for God’s sake!
I wish like hell we could vote your arrogance out of office and then you could try to live on $450.00 a week and support your wife and three kids on that. But what I wish for more than anything is that I could then vote to take it away from you without warning! If you Republicans believe in the same God I do, I pray He resigns down on you an Eye for an Eye. And because I have faith the size of a mustard seed in Him, which is 1000% more faith that I have left in your heartless folly, I know that He will.

Sincerely Yours, One of a Million+++ Disenfranchised Republican Unemployed Voters.

Posted by: AbigailAdams1 | July 1, 2010 10:16 PM | Report abuse

Dear Reader and Fellow Americans,

Please cut and paste the link below into your browser. It is a map of your country that tracks the national unemployment rate per county, per state, in a shaded map for the last 3.5 years from 2007-2010. The darker the area / region gets the higher the unemployment rate.

http://cohort11.americanobserver.net/latoyaegwuekwe/multimediafinal.html

To all the Republican Senators who just voted NO for the fourth time and have refused to SAVE your fellow unemployed Americans who have giving you your job, I ask that you find a spare moment during you Independence Day vacation and just take a look at the map of your country. Find your state and your voting district. Than just take a wild guess as to many of your constituents are involved here. Good luck to all of you in November, we can't wait to return your vote NO!

And to my fellow citizens who are lucky enough to still be currently employed and feel this matter does not affect you, please find your state and county on the map above and see just how really close you are to being next in line at the unemployment office.

Posted by: AbigailAdams1 | July 1, 2010 10:18 PM | Report abuse

My husband and I were lifelong, very active Republicans. THAT HAS FOREVER CHANGED TODAY!!! You disgusting Washington Politicians and the financial rapist on Wall Street all share the same bed. Since my husband lost his unemployment extension three weeks ago by the complete and utter incompetence of our Republican Senators and their complacent failure to remedy and recognize a National working class crisis, we have endured the deficit changes to our budget by your actions in the following way. I had the braces removed 6 months early from my 13 and 14 year old children’s teeth. My car got repossessed since I chose to pay the rent instead of the car to keep a roof over our heads. I emphasize the word RENT, because we already LOST our FAMILY HOME of 13 YEARS to FORECLOSURE!! As a result of losing my car, I have had to stop working at the bedside of a 90 year old Hospice patent with congestive heart failure because I can't get there! Her family says she is declining since my abrupt absence and she can’t understand why I’m not coming anymore. Neither can I! Now myself and my husband are both unemployed!
Now that I don’t have a car, I have applied for Medicaid for my three children. And since we don’t have a car, they now qualify. In the last two weeks, I have saved money by not buying frozen concentrate juice from the grocery store. Instead I have hand squeezed over 52 lemons, which I picked myself from a lemon tree in the yard of our rented house, to make lemonade for my children to drink in lieu of buying store bought fruit juice. THANK YOU REPUBLICAN SENATORS FOR MAKING ME FEEL LIKE AN ILLEGAL IMMIGRANT IN MY OWN COUNTRY!!! I have negotiated with a doctor for his best cash price to see my daughter who had fallen ill, only to get to the pharmacy and find his prescription was $62.00 when the doctor’s visit was only $50.00. I had to have the doctor call the pharmacy and prescribe something available from Wal-Mart’s $9.00 generic brands.
This is just a glimpse in the life of one of the over 1.5 million Americans you have affect in just the last 3.5 weeks by your blatant neglect. I only wish we could all AFFORD the GAS to drive to the steps of the Capital to hold you Republicans accountable. Before this Depression set in, my husband was the Manager of a thriving construction company, after having worked in the construction industry for over 20 years. Construction is no longer an Industry, it’s a charity. He was laid off along with every other employee that he worked with and supervised, all now on unemployment. His former employer is completely out of business after 30 years of outstanding service and workmanship. THANKS TO THE REPUBLICAN SENATORS WE ALL FEEL LIKE ILLEGAL IMMIGRANTS IN OUR OWN COUNTRY!!!

I cannot strongly agree with economist Nouriel Roubini (Doctor Doom) when he said, "When Americans lose everything, they lose it."

Posted by: AbigailAdams1 | July 1, 2010 10:21 PM | Report abuse

The Senators let us hang out to dry for their Memorial Day vacation. Now it's the Fourth of July. I am a proud and very angry American.

But we unemployed Americans can't celebrate our independence from Tyranny on July 4th because of the Tyrants.

The Tyrants will take a 7 day vacation from doing NOTHING! When will we revolt? WHEN? After they have starved us to death and we are too weak to fight or even speak! What the hell are we doing AMERICA?

Our Declaration of Independence was founded on the concept that any civil government depends on the consent of those who are governed, which may be withdrawn at any time.

On this Independence Day, are you able to celebrate your consent to be governed by people who chose to let you and your family starve while they take their second 7 day paid vacation in a month?

Can you image having two 7 day paid vacations in the span of just 30 days?
They just got back from their Memorial Day vacation on June 7th (Memorial Day was Monday, May 31st) refusing to act to prevent your extension from expiring on June 2nd, 2010.

Ask yourself, is our government acting reasonably?

I argue they are as unreasonable as Marie Antoinette. What should we eat at our Independence Day cookout, Cake?

Shame on us if we continue to do nothing. Shame, shame on us if we do not withdrawal our consent to be governed by this reckless government.

Our founding fathers had no phones, cars, internet to communicate between each other their dissatisfaction with being governed unreasonably.

Instead they used invisible ink and rode on horseback in the dead of night, up and down the entire East Coast including the interior southern states no less, to communicate between each other their dissatisfaction regarding their government’s unreasonable behavior.

Their horseback trail later became the route for the first postal service.

What is the matter with us that we are so feeble that we would accept this as reasonable behavior from our government?

On this Independence Day, ask yourself if you are going to continue to do nothing by giving your consent to be governed by this horrendous government?

I beg of you, would any reasonable person consent to this?

Posted by: AbigailAdams1 | July 1, 2010 10:23 PM | Report abuse

thanks for getting me evicted Senate, I know it's not all about me but I am just telling my story. There are a million just like it.

Posted by: sghdr | July 1, 2010 11:10 PM | Report abuse

Patrick_M writes: "An what are the vast numbers of unfilled jobs that we should be paying to train people to do?

Working people pay taxes into the system of unemployment insurance in the expectation that they will be able to collect insurance benefits if and when they lose their employment due to circumstances beyond their control. Outside the Republican party (+ Ben Nelson) UI is not looked upon as a 'give-away' program."

If employers/employees are charged a UI premium based on a maximum benefit of 26 weeks worth of cash payouts (for this example) for job loss, it is fair to get 26 weeks of unemployment benefits. But 99 weeks? It goes without saying that the fiscal conservatives would need some kind of fig leaf to hide behind to justify that.

As for the kind of job training, it doesn't have to be industry specific. If unemployment in this Great Recession has hit workers who don't have college degrees the hardest (as previously discussed EK's blog), provide an 'incentive' for those people receiving unemployment to enroll in classes to start on the path for associate or bachelor degrees. And if job training for green jobs is a real priority and not just political rhetoric, steer the unemployed which qualify into those programs.

Patrick_M writes: "If (as justin84 has explained) the extension of the tax credit will only benefit transactions that are still closing, and it will not stimulate even one new sale, it will do none of those things."

It does to the extent that the extension eliminates an $8k reason for those home buyers on the bubble to not back out of the sale.

Posted by: tuber | July 1, 2010 11:12 PM | Report abuse

Good grief! What a bunch of pablum! Why should taxpayers support you for two years or more? How much debt am I supposed to take on in order for you to maintain your lifestyle? Get two jobs if you have to. It's not my responsibility to raise your kids. In case you haven't noticed, we are $13,000,000,000,000 in debt.

Thank you Republicans for stopping this bill. I hope you stand firm and not wimp out as you usually do.

Posted by: groovercg | July 1, 2010 11:15 PM | Report abuse

"The homebuyer tax credit keeps people employed in construction and financial services, helps work off the overhang in housing inventory, lets the banks move reos, keeps some small homebuilders afloat, and even helps the retail sector (think Home Depot, furniture stores)."

But the tax credit also encouraged homebuilders to ramp up production. Homebuilding is up nearly 40% from the 2009 low, but sales are now at a record low and months supply of inventory is back over 8 months.

http://www.forecast-chart.com/chart-housing-starts.html

Now that the credit's gone, housing demand has crashed, and we've already 'spent' a lot of 2010H2 and 2011's demand. Anyone who wanted to buy and could afford a house got in already. We've ended up with a W shaped crash rather than a V.

Also, I'd guess a lot of those 3.5% down FHA loans are at risk of going underwater soon, since housing prices are likely to resume falling.

Buyers are encouraged by markets that have crashed, but not by markets that are crashing. Had there been no intervention, in all probability the housing market would have bottomed already and would be rebounding. As it is, new home sales have collapsed to a record low 300,000 pace, and pending home sales (used and new) are off 30% in just the past month. Demand fades again and prices start to fall again.

I agree with Patrick here. Markets need to be able to work themselves out. Government support just delays the adjustment. We spent tens of billions of dollars on middle class home buyers and are turning away the unemployed. Given the choice, I'd rather have my money spent to put food on someone's table than buying someone's new Crate and Barrel table for their new home. I don't think unemployment insurance is all that stimulative, but I do think it is humane.

Posted by: justin84 | July 1, 2010 11:32 PM | Report abuse

I agree, the UI extension is more important and powerful than the home buyer credit. In business, nothing happens until somebody buys something. Holding on to or saving stimulus funds does nothing to help our economy to recover, UI benefits are immediately spent and circulated into the economy.

Although it appears that the UI extension will be finalized after they reconvene, I believe we will be presented with convincing and revealing BLS figures that will show the negative effect of their inability to pass this bill in a timely manor. Hopefully, the further erosion of our economy from this event will be minimal and reversible.

Some of the members of our legislative branch hold disturbing attitudes about the unfortunate people that are unemployed; most of these revolve around the recipients’ desire to simply collect benefits rather than locate work. Although this may exist, it would be very limited. Anyone that has knowledge of such activity also has the responsibility to file a benefit fraud report to the respective state. I have yet to see or hear the results of a single litigated case to support these claims.

Federal law addresses UI fraud and those laws were produced by these same legislators. It seems as if they pass these laws and do absolutely nothing to police them, even when they themselves are privy to specifics. Are these just “hollow” laws?

Posted by: Voxpopuli2 | July 1, 2010 11:40 PM | Report abuse

whats sad is this 8,000 homebuyer credit is more than what i got in unemployment in a year...

Posted by: nicky_83 | July 2, 2010 12:47 AM | Report abuse

"recipients’ desire to simply collect benefits rather than locate work. Although this may exist, it would be very limited. Anyone that has knowledge of such activity also has the responsibility to file a benefit fraud report to the respective state. I have yet to see or hear the results of a single litigated case to support these claims."

Would you turn in your family or friends if you knew they bailed on a pizza delivery job or waiting tables to hold out for something better?

The Fed believes about 1.5 million people or more may unemployed by choice, holding out for better work. Pg 14, paragraph 3.

http://federalreserve.gov/newsevents/press/monetary/fomcminutes20100127.pdf#14

A research paper suggests that 34% of people on unemployment insurance found jobs immediately upon benefit expiration in the early 1980s in the depressed Pittsburgh market (when unemployment was comparably high).

At the end of the day, it's the 25% that should concern us most (as these are the ones that really need help), but we need to make sure to tailor our assistance so as not to inflate unemployment in the process.

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1539491

Posted by: justin84 | July 2, 2010 12:50 AM | Report abuse

groovercg says:

"Why should taxpayers support you for two years or more? How much debt am I supposed to take on in order for you to maintain your lifestyle? Get two jobs if you have to. It's not my responsibility to raise your kids."

Two jobs? They will gladly settle for one, but the problem is that there are *none* to be found. Capiche?

If we cut millions of families off of unemployment benefits you don't think you won't end up paying "raise their kids" on public assistance and social services? Do you think additional foreclosures and escalating poverty will help the economy grow?


tuber says:

"As for the kind of job training, it doesn't have to be industry specific. If unemployment in this Great Recession has hit workers who don't have college degrees the hardest (as previously discussed EK's blog), provide an 'incentive' for those people receiving unemployment to enroll in classes to start on the path for associate or bachelor degrees. And if job training for green jobs is a real priority and not just political rhetoric, steer the unemployed which qualify into those programs."

Again, I am all for the government providing re-training for whatever jobs exist that are going unfilled due to a lack of qualified applicants. Too bad that is not the problem. Even if it were the case, unemployed people still need a source of income while they re-train or attend college, and there is little point in doing either one of those things unless and until there is a surplus of jobs that can't be filled, due to a shortage in the labor force of specific skills and/or college-educated workers.

Yes those with degrees have been least likely to suffer layoffs, but that does not mean there are adequate openings for unemployed people with degrees. We have just graduated another annual class of college students into an economy with 10% unemployment. Cranking out more degrees and certifications doesn't solve anything.

The problem is not that jobs exist for which the millions of unemployed are not well qualified, the problem is a dire shortage of jobs. We need to create jobs and meanwhile keep the lifeline out there to the millions of suffering unemployed until there are jobs for them to fill.

Posted by: Patrick_M | July 2, 2010 1:00 AM | Report abuse

"A research paper suggests that 34% of people on unemployment insurance found jobs immediately upon benefit expiration in the early 1980s in the depressed Pittsburgh market (when unemployment was comparably high)."

So what? You still have the same (large) number of unemployed chasing the same (small) number of jobs.

It is inarguable that if there is a deadline looming, people are likely to leap and take any position, no matter how bad a match to their experience and skills. But the research paper shows 2/3 do not manage to even do that. For the 1/3 that do, they are simply extending the unemployment of someone else who would have taken the job, and for whom the job might have been a nuch better fit. The numbers don't get any better.

And even this 30 year old research project (on one city) shows that 2/3 of those who lose benefits will have failed to find a position, which is hardly a good outcome for the unemployed, or for society at large.

Posted by: Patrick_M | July 2, 2010 1:12 AM | Report abuse

"Two jobs? They will gladly settle for one, but the problem is that there are *none* to be found. Capiche?"

Settle for one? If you need more than one to meet your family's needs,

BTW, maybe you should go to bed so you can get up early to spend your whole day looking for a job. Capich?

Posted by: groovercg | July 2, 2010 1:16 AM | Report abuse

"Settle for one? If you need more than one to meet your family's needs,

BTW, maybe you should go to bed so you can get up early to spend your whole day looking for a job. Capich?"

I run my own successful business, but thanks for your concern.

You definitely take the Marie Antoinette prize of this thread ... the unemployed should take two jobs instead of receiving unemployment benefits ... "Let them eat cake."

Get a clue about the simple reality of far more job seekers than job openings. They can't find two jobs; they are lucky to ever find one in this environment. Try to wrap your mind around that simple fact. Otherwise, you will find the news to be confusing, and your thinking will continue to be confused.

Posted by: Patrick_M | July 2, 2010 1:57 AM | Report abuse

Patrick_M writes: "The problem is not that jobs exist for which the millions of unemployed are not well qualified, the problem is a dire shortage of jobs. We need to create jobs and meanwhile keep the lifeline out there to the millions of suffering unemployed until there are jobs for them to fill."

What timing...

_Factory Jobs Return, but Employers Find Skills Shortage_
http://www.nytimes.com/2010/07/02/business/economy/02manufacturing.html

**exerpt: Plenty of people are applying for the jobs. The problem, the companies say, is a mismatch between the kind of skilled workers needed and the ranks of the unemployed.**

OT: guess we don't live on Eastern daylight time.

Posted by: tuber | July 2, 2010 2:48 AM | Report abuse

Job training? Are you kidding? Who has the time? We are looking for work 24/7 mostly on the internet. Very few will talk with us in person about a job.

I for one applied for over 250 jobs since May '08. All but one via the internet. I have had 8 interviews. Some say that's very good. But I know for a fact anywhere from 15 to 85 others applied for those same jobs. So my chances of landing a job are currently slim to none at best.

PLEASE send an email to your Congressmen via their sites and ask them to extend unemployment benefits at least through November. Families lives depend on it!

And the concern that these benefits will add to the national debt is sheer stupidity. Wait til Congress has to pay for homeless shelters. That will be America's number one need very soon!

Get real. Create jobs. Ask employers to create jobs and forget the profit margin. Because soon there could be no profits for anyone. Please give us the benefits so we can find a job while we shelter and feed our families. THANK YOU!

Posted by: skull68 | July 2, 2010 4:07 AM | Report abuse

it's the best way to keep giveing money to the banks. No one would be buying a house if not for this tax credit.

Posted by: obrier2 | July 2, 2010 8:22 AM | Report abuse

The Senate left for their vacation and did not extend unemployment for thousands of Americas, who are losing unemployment benefits weekly. How could they do this to us, the people the people they promised to help? We look for jobs daily only to be confronted with more companies laying off people. How are we to pay bills without any income? My ex-husband, who fights child support on every occasion, has lost his unemployment benefits and now I do not have any child support either. They are worried about increasing the deficit, what do they think will happen when we all have to go on welfare? Please HELP 11 million of us unemployed people who so desperately want to work. I am so scared that my teen-age son and I will be homeless within months, what should I do?

Posted by: sminkoff | July 2, 2010 8:27 AM | Report abuse

Another reason I didn't like this homebuyer tax credit. Mark my words, it'll become just like the AMT and the "doc fix", which politicians bemoan, then eagerly extend.

Posted by: jldarden | July 2, 2010 8:38 AM | Report abuse

"Get a clue about the simple reality of far more job seekers than job openings. They can't find two jobs; they are lucky to ever find one in this environment. Try to wrap your mind around that simple fact. Otherwise, you will find the news to be confusing, and your thinking will continue to be confused.

Posted by: Patrick_M"

I'm not confused about anything. As long as there are help wanted signs in store windows, a person can find a job. If you are hungry, you will do any kind of work. I fully support UI for 6 months or even a year, but 2 1/2 years is too much. You haven't answered the question as to what your limit would be.

Posted by: groovercg | July 2, 2010 9:33 AM | Report abuse

everybody look back in history all great nations fell from within because of in fighting within there senate just like in Roman. we are heading in the same direction. look back NAFA hurt more thsn anything this let big businees's go outside the US to buy products that where built here, that when most jobs where lost and it will continue. it's big busness's that control the senate with there money we will never be the same country again until things change. unemployment will continue as jobs move outside of this country to third world countries. we help the world not only with are money but our military, just like the Roman's.

Posted by: pathman1024 | July 2, 2010 9:51 AM | Report abuse

oh yea, there people where unemployed and starving to.

Posted by: pathman1024 | July 2, 2010 9:57 AM | Report abuse

"So what? You still have the same (large) number of unemployed chasing the same (small) number of jobs."

The number of jobs isn't a fixed quantity.

Sketch a labor market model. Wages on the vertical axis, employment on the horizontal axis. As wages rise, the amount of labor supplied rises (upward sloping labor supply curve). As wages rise, the quantity of labor demand falls (downward sloping labor demand curve). The intersection of these curves provides an equilibrium level of employment and an equilibrium real wage.

Now shift the labor supply curve to the left - basically, at any given wage less people are willing to work. The equilibrium wage rises a bit, and employment falls. The existence of unemployment benefits reduces the chance a person will take a low paying job.

When a person takes a job, they are creating new wealth via output. This new wealth allows them to spend what they would have gotten on unemployment, and the dollars that would have otherwise been given to them via unemployment insurance can be spent on something else.

http://en.wikipedia.org/wiki/Lump_of_labour_fallacy

This all being said, the expiration of unemployment insurance isn't going to let unemployment drop to 5% overnight. You do need a safety net, although it should be one that minimizes the incentives not to take a low paying job.

"And even this 30 year old research project (on one city) shows that 2/3 of those who lose benefits will have failed to find a position, which is hardly a good outcome for the unemployed, or for society at large."

The 1/3 found a job basically instantaenously. It was in the first week. 1/3 of people were waiting for benefits to expire. 3/4 eventually did.

I never advocated getting rid of UI entirely, merely changing the incentives so that the 1/3 who can find work do find work, and strengthening the safety net so the 1/4 which never did are never cut off.

Under the current regime, we give people incentives not to find low paying work and cut people off of benefits that cannot find work at all. How is that better?

And while you claim this is just in one city, it is solid emprical evidence - not the result of a model, but actual observational evidence - that unemployment insurance reduces employment. The Fed has estimated (unfortunately, this is model driven) for the current downturn, nationally, that 1.5 million + jobs might not exist today due to unemployment insurance extension.

Posted by: justin84 | July 2, 2010 9:58 AM | Report abuse

Employers don't hire for labor or service positions anyone they deem "overqualified" because those people will jump ship as soon as there are better opportunities. Hiring and training people costs money - it's always better to hire someone who will stick around for the long run.

Experienced workers can't just go work at McDonald's or Wal-Mart because those companies have no incentive to hire them. And the longer someone is unemployed, the less attractive they appear.

For free market evangelicals, conservatives don't seem to understand the incentives at work for employers.

Posted by: lol-lol | July 2, 2010 10:26 AM | Report abuse

Basic economic principle..... money flows up faster than it flows down. Trickle down economics proved this.

Republicans want businesses to get tax cuts and incentives to create jobs and there are some businesses that actually will do this but most tend to look at the bottom line for their share holders and company officers rather than spending the money to add members to their teams.

Unemployment benefits are funds that goes directly back into the economy for energy bills, food, insurance, mortgages, etc. This money helps boost demand for products and services that require people to provide.

A demand for products and services is truly the incentive that makes companies move to add to their work forces. Nothing worse for a company than not being able to get out the products and services there is a demand for because they do not have the workers to make it happen.

Posted by: phlsouthernjack | July 2, 2010 10:53 AM | Report abuse

"I'm not confused about anything. As long as there are help wanted signs in store windows, a person can find a job."

Let's see...

Evidently, there is now at least one available job for every person that wants one. Today's awful numbers are of no concern, somebody's just makin' that stuff up. Barack Obama has suddenly added back all of the jobs lost in the Great Recession! There is no problem at all in the current economy (except that we give benefits to people when they could all be working one or even two jobs!).

Yeah, right.

Posted by: Patrick_M | July 2, 2010 10:57 AM | Report abuse

"For free market evangelicals, conservatives don't seem to understand the incentives at work for employers."

Posted by: lol-lol

How about the incentive of having lower taxes to spend on job creation?

"Republicans want businesses to get tax cuts and incentives to create jobs and there are some businesses that actually will do this but most tend to look at the bottom line for their share holders and company officers rather than spending the money to add members to their teams."

The goal of a business is to make money for its shareholders. It is not a social engineering club. If a company needs new employees, it will hire them because they think the new employees will make them money.

BTW, businesses don't pay taxes. Taxes are a cost of business that is passed on to the consumer.

Posted by: groovercg | July 2, 2010 12:35 PM | Report abuse

Senate Republicans offered a number of compromise bills on unemployment benefits, but democrats rejected them. Republicans were in favor of an extension of benefits if they could be paid for through unused stimulus money. The democrats want to add to the deficit. They also want an issue, not a solution.

Posted by: groovercg | July 2, 2010 12:55 PM | Report abuse

groovercg-

For the record, I would have absolutely no objection to paying for the extension by cutting subsidies to big agriculture, big oil, carving a little spending out of the Pentagon budget, etc. I would also support a temporary tax on the Wall Street firms and mortgage lenders that caused the collapse in order to fund the cost of the resulting unemployment insurance claims.

But, as has been pointed out, to take money out of stimulus spending, which is designed to create jobs that will get people out of unemployment, in order to extend payment of unemployment benefits, makes no sense at all. It is the Republicans that are playing the "deficit peacock" card of issue over substance with that supposed "solution."

I think this thread has just about run its course, but here are my final thoughts. I can understand a debate about not paying benefits forever. I can undrstand a debate about not extending benefits without finding a new source of revenue, or something to cut, in order to pay for the extension.

But what I cannot understand is the argument made by a few on this thread that we should blame unemployment on the unemployed themselves (because there supposedly are plentiful jobs for anyone willing to work). That is pure nonsense, and an insult to the millions of good people whose families are suffering.

Posted by: Patrick_M | July 2, 2010 1:42 PM | Report abuse

This isn't really that difficult. There is roughly 1 job for every 5 applicants and, if you added in all the people who have stopped looking, it's about 1 job for every 10. To say there are "help wanted" signs in local store windows is OBVIOUSLY anecdotal any thinking person would never offer it as evidence for anything.

According to, well, just about anyone outside of right wing fantasy world if these benefits lapse the economy could tank and everyone will suffer the consequences. These are the same people that are for spending on endless wars, corporate bailouts and tax breaks, and giving away 500B to Big Pharma, but magically draw the line at helping people who are suffering. Our society of anti-social greed, driven by far right politics creates a "blame the victims" and not the culprits mentality, repeated by these bought and sold politicians. It's our own neighbors that are the problem, not the corporate rule of our "democracy".

Posted by: jbrownil | July 2, 2010 1:43 PM | Report abuse

jldarden writes: "Another reason I didn't like this homebuyer tax credit. Mark my words, it'll become just like the AMT and the "doc fix", which politicians bemoan, then eagerly extend."

I think the homebuyer tax credit will be treated by lawmakers more like the old ITC (investment tax credit) rather than the AMT.

Posted by: tuber | July 2, 2010 2:32 PM | Report abuse

Tax, tax, tax, tax, spend, spend, spend, spend. That's the answer. Tax and spend our way out of a recession. Pelosi says unemployment benefits are one of the greatest stimuluses[sic] we have. Tax, spend, tax, spend, spend, borrow, borrow, borrow. Yeah, that's the way to prosperity.

Posted by: groovercg | July 2, 2010 3:05 PM | Report abuse

This is for Groovercg.
Since there are so many help wanted signs hanging why don't you apply for those jobs just to see if you get a callback from them.
I highly doubt it.
I have been looking for a job for 2 years now, must have put out 1000's of resumes. The only replies I got was to work at home for companies that don't exist.
Idiots like you should lose your jobs just so you can have a taste of the medicine we the unemployed are taking.
I have worked my whole life raised 3 kids had a nice home and car. Now I have shut off notices for my utilities,credit card bills that I can't pay and my home is in foreclosure for 2 years now.
I am soooo disgusted by the mouths of idiots that have no clue. If your working your lucky so keep your mouth shut and enjoy your job while you have it.
By the way is your company hiring????? Can you send a ticket to get there so I can apply??? Maybe they will hire me because I am so special....LOL

Posted by: moonpie1931 | July 2, 2010 3:12 PM | Report abuse

did anyone see the latest report from Georgia Tech U. that was on CNN News today, most CEO's will not hire old empolyees back because they can get work done with the workforce they have today because of all the latest technology.

Posted by: pathman1024 | July 2, 2010 3:23 PM | Report abuse

Let's see. Groovercg writes that a "person who can't find a job in two years isn't trying, then goes on to ask when benefits should stop - Five years, ten or a lifetime?" Maybe groovercg didn't notice we are in the midst of the worst economic downturn in decades. The Republicans broke the budget by forcing the country to spend 700 billion on the Iraq war - with precious little oversight. But instead of being outraged about this, groovercg is indignant about Democrats hoping to spend a mere fraction of this amount to help the unemployed stay afloat during this crisis. We should fund unemployment benefits for as long as it takes for the country to get beyond the current crisis. Workers pay into the unemployment fund with every paycheck. I know I've been working steadily since age 16, sometimes working 2 and 3 jobs concurrently. That's more than 40 years of paying into the system. If I have a choice I'd rather pay unemployment benefits and help our workerforce than support an endless war machine.

Posted by: taami | July 2, 2010 5:58 PM | Report abuse

Let's see. Groovercg writes that a "person who can't find a job in two years isn't trying, then goes on to ask when benefits should stop - Five years, ten or a lifetime?" Maybe groovercg didn't notice we are in the midst of the worst economic downturn in decades. The Republicans broke the budget by forcing the country to spend 700 billion on the Iraq war - with precious little oversight. But instead of being outraged about this, groovercg is indignant about Democrats hoping to spend a mere fraction of this amount to help the unemployed stay afloat during this crisis. We should fund unemployment benefits for as long as it takes for the country to get beyond the current economic crisis. Workers pay into the unemployment fund with every paycheck. I know I've been working steadily since age 16, sometimes working 2 and 3 jobs concurrently. That's more than 40 years of paying into the system. If I have a choice I'd rather pay unemployment benefits and help our workerforce than support an endless war machine.

Posted by: taami | July 2, 2010 5:59 PM | Report abuse

"Workers pay into the unemployment fund with every paycheck. I know I've been working steadily since age 16, sometimes working 2 and 3 jobs concurrently. That's more than 40 years of paying into the system. If I have a choice I'd rather pay unemployment benefits and help our workerforce than support an endless war machine."

Posted by: taami

Not so. Unemployment insurance is paid for by the employer. There is no where on you paycheck where you have a deduction for unemployment insurance.

I had rather have millions of Americans working in the defense industry than having them unemployed and living on UI.
Who do you think makes the bombs, tanks, planes, boats, etc. The military elfs in the basement of the pentagon?

Posted by: groovercg | July 2, 2010 9:11 PM | Report abuse

"Idiots like you should lose your jobs just so you can have a taste of the medicine we the unemployed are taking.
I have worked my whole life raised 3 kids had a nice home and car. Now I have shut off notices for my utilities,credit card bills that I can't pay and my home is in foreclosure for 2 years now."

I hope you get a job soon. Maybe then you will stop using your credit cards, stop going into debt you can't afford, and move to a house you can afford. Maybe you could get some money by selling your second car or your computer. Maybe your kids could help support you, since you supported them so long. Why should I support you if your family won't? Have a nice day.

Posted by: groovercg | July 2, 2010 9:21 PM | Report abuse

PLEASE KEEP IN MIND.

These people are stalling on 30 billion but don't hesitate one minute, to spend that in one month on war. Is it in the name of homeland security or profit? The countless soldiers that have died on our congress's watch over sheer lies and conspiracy is a shame and the reason other countries take issue with ours.

War mongering, cunning individuals doing their business and getting by with it behind closed doors, these are the kind of people we as a country have elected, these are just some of the faces of the "elitist" class.

The most important fact the good citizens of our fine country do not realize, these people truly believe they are above the rest of us, not just the unemployed but anyone who isn't in their social class, because that's what our government has become, a social class.

My advice, find a way to employ yourself! I did, I'm not rich yet but I don't take orders and I don't have to count on the slime balls that voted the extension down.

I personally wouldn't put it past them to use their elitist forces against us one day if the people of our country ever did try to run them off of capitol hill.

I say just refuse to vote for any of them. Create a political mess, demand they meet us in the middle and listen to us and quit making the rich, richer, by making laws that help improve the lives of those who don't have access to the entitlements they do.

I won't deny that it takes a lot to run a country, our country in particular, but the people in our congress and senate have formed an echelon untouchable to the outside world. We are unable to truly know what they are up to, that's how locked down they have become to the the citizens on the outside, the majority.

Over time, the same mentality has been applied to our government and over time it has become a monster.

Posted by: mvpme | July 6, 2010 1:14 PM | Report abuse

Whoop! Whoop! Whoop! The sky is falling!!!!
The black helicopters are circling!!!!!

I wonder how people know about all this stuff if it goes on behind closed doors.

Posted by: groovercg | July 6, 2010 5:01 PM | Report abuse

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