While we are all focused on the U.S.S. Obamacare dodging more icebergs than the Titanic there is other legislation we need to pay attention to.
Yet another extension of the Emergency Unemployment Compensation (EUC) program is looming on the horizon. By the end of 2013, if the EUC is not extended an estimated 4.1 Million long term unemployed will lose their unemployment checks.
The EUC program began in June of 2008 when it was realized the housing bubble was about to burst and plunge the U.S. into recession. What began as an emergency and temporary plan soon became the chosen vehicle to extend unemployment benefits to some 11 Million Americans.
The program went through its first major extension in 2009 with the passing of the Stimulus program (American Recovery and Reinvestment Act of 2009); which not only extend the benefits, but raised the amount of those benefits by $25 per week for the remainder of 2009. The unemployment benefit portion of the program was eventually stretched through 2010 and those who remained on the program for the duration were commonly referred to as the 99ers because they were able to collect those benefits for 99 weeks.
The term 99ers began to catch the attention of those who were still employed, some of whom were forced to take less lucrative positions to remain employed, and there were complaints. Unemployed for 2 years and unable to find employment was the common question of the time being asked by those who were still working.
Those complaints became a problem for those in power, so our devious government had to figure out a way to keep the checks going out while avoiding explaining yet another extension. So to disguise further extensions and avoid political backlash after the 2011 extension the EUC became part of other programs, never to be publically referred to as EUC again.
As you may or may not recall, unemployment benefit extension became a political football in negotiations between the Democrats and Republicans during debt ceiling debates, so while we were all focused on the outcome of those childish arguments the EUC was extended quietly, with neither side complaining, and the con was complete.
In Feb 2012 the EUC was extended once again, this time under The Middle Class Tax Relief and Job Creation Act of 2012. While few, if any, jobs were created, the benefits for the long term unemployed were extended, through a series of steps, until Dec 2013.
Over the past four years unemployed Americans have collected $434 billion in unemployment benefits and yet some 4 million long term unemployed remain on the rolls. If the program is extended another year it is estimated the extension would cost between $25 and $40 Billion more (the discrepancy is due to difficulty in estimating exactly how many Americans will come off the roles in the next 12 months).
There are those who think if the benefits are ended it would create more job losses because people on unemployment are more likely to spend the money right away. Nancy Pelosi thinks unemployment checks stimulate the economy (Lord help us). Granted it does create economic activity, however it doesn’t stimulate the economy. Stimulation only occurs if said action creates more jobs and increases productivity, thereby creating more capital.
The only thing unemployment, as well as any other form of welfare does, is take money from those who create wealth and give to those who don’t. This is otherwise known as distribution of wealth. While all welfare was intended to be a short term stop gap to those in need, Liberal administrations never want the programs to end. While short term assistance is a helping hand, long term federal commitment only creates additional drain on those who produce.
Sadly many people in positions to influence economic policy today are from the Kenyan school of economics (those who think distribution of wealth is a good thing). And while I am more understanding of those on unemployment (since workers actually contribute to the unemployment pot)than those on welfare in general, there has to be a limit on those benefits and 5 years down the road is long enough.
Many people will just not put forth the effort to better themselves until they are forced to, maybe the discontinuation of this program is just the motivation they need to get off the duff and start contributing. And before you begin full scale lamentations over those poor unemployed soles consider the fact the current plan is not working and the $17 Trillion National Debt is the proof.
Let’s not allow Congress to kick this can down the road any further, and they will if we are lax in paying attention to their trick of tucking known programs into newly named ones.