Nov 19 2010
Good News On Unemployment Extensions
People will not be sitting on unemployment for years anymore, waiting for the perfect job:
The House of Representatives on Thursday voted down a measure that would have reauthorized extended unemployment insurance for another three months, leaving no clear path forward to prevent the benefits from lapsing as scheduled on Nov. 30.
Without a reauthorization, the Labor Department estimates that two million long-term unemployed will prematurely stop receiving benefits before the end of the year.
What these people fail to explain is these 2 million people have been living off the rest of us for YEARS. Sorry, but time is up – find a job.
Federally-funded extended benefits, which give the unemployed up to 73 weeks of benefits once they exhaust 26 weeks of state benefits, have needed several reauthorizations in the past year, and Congress has let them lapse three times.
52 weeks per year mean these people have to avoid finding any job for almost 2 years (104 week) before these extra extensions need to kick in. Want the unemployment to go down? Force people to get out and start working again. And yes, I have been there myself the last few months finding just about any work possible to keep going. Sympathy has an expiration date – and 2 years is well past that point.
A friend of mine was layed off about a year or so ago. He said the unemployment benefits weren’t too bad. He had to reach into his own savings a bit but as he put it “not too deep”.
Then the benefits expired (temporarily it turned out) and he suddenly found himself motivated to find a job. He actually made his own job and started a small business selling networking gear and consulting services. He told me that had it not been for the last expiration of benefits, he might *still* be sitting on the couch.
I still don’t think the Democrats really want to let the benefits go away. It would mean too much competition in the workforce with illegals who are a core Democrat constituency. It is better politically for the Democrats to pay Americans to sit on the couch and let the illegals have lower paying jobs. It is a win-win for the Democrats. The people collecting the benefits vote for them and probably a good many of the illegals do, too.
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The Dems don’t want to let unemployment payments go because, “think of the people”. OK, lets also think of the people who have to pay the bill. Perhaps if the unemployed were not being payed they would get Obama to really think about how to create jobs. Nothing like a million or two really angry people in the street getting the Presidents attention.
John Boehner filed something that challenges the constitutionality of ObamaCare.
Then I read this article saying that 33 Senate Republicans File Court Brief Challenging Constitutionality of ObamaCare, 9 RINOs Pass…
http://weaselzippers.us/2010/11/19/33-republican-senators-file-court-brief-challenging-constitutionality-of-obamacare-9-rinos-pass/
This blogger says that the only RINO that irks him is Scott Brown. After looking at the 9 RINOs, I can understand why. He is implicating that the rest of the 9 RINOS are expected.
Some of them are leaving soon. Glad to see them go. The rest of them need to be voted out of the office.
Of course I agree that long term unemployment benefits are disastrous for the economy – this is the model that not so Great Britain has followed over the last several years which has now created a huge army of persons who never work and never need to, since they are guaranteed monthly checks and free housing for life. (crawling out from under that socialist burden is Britain’s greatest challenge)
But, as with any challenge, it has to be worked on from both sides of the equation. Motivating people to get out and look for work does nothing if new jobs aren’t being created, and we are deep in this recession and still we have no net new job growth. (In fact, we’re still losing jobs slightly, although we’re close to flatlining)
Why are we not creating any jobs? Because small business, the great creator of jobs in this country, is still too insecure about future policy to take any risks. Forget interest rates, that’s not why small businesses are founded and grow – they have to have confidence as to what the future business climate (future meaning 2 -5 years out) is going to look like and especially what future government policy is going to be, especially with respect to regulations and tax rates.
When a small business owner has no idea what’s coming next, but suspects it will be bad, then the universal response will be to hunker down, take no risks, and wait until some type of certainty can be had. No one is going to take a big risk to make income when the threat of punitive tax rates are right around the corner, or the threat of massively increased energy costs.
And that’s the problem we’re in today – even with the gains in Congress, there’s still no certainty as to what the tax and regulatory outcome will be. The Democrats are still hell-bent on raising taxes on any filer with over $250K in income! As you may recall, I wrote a few posts back how this was *NOT* the range of wealthy individual filers, who are all able to shift income into sheltered areas thus allowing them to avoid this rate; this is the rate for Subchapter S corporations, which are exactly the type of small businesses that we need to create new jobs. They will not take the risk as long as the threat of confiscatory taxation is hanging out there. I wouldn’t take that risk, personally.
Threaten to raise their taxes, now or 2 years from now, and we will not create any new jobs in this economy, and the unemployment rate will continue at these sky high rates no matter what policy we follow with regard to unemployment benefits. In fact, cutting unemployment benefits without creating new jobs is likely to trigger a whole new round of defaults and foreclosures in the housing market, this kicking off a new round in the financial crisis.
THIS is why it is absolutely vital that ALL the Bush tax cuts be extended *Permanently*, not just temporarily! No permanent tax cuts, no new jobs, no recovery for this economy. Putting the decisions off until 2012, which is what a two year extension would do, means putting off the *beginning* of a recovery until 2012. With unemployment eating away at the underbelly of our economy like a cancer, I do not believe we can afford to wait that long.
Where I work, in the last 3 years, about 500 people have been laid off. Of those I know, 3 have found employment. Several are going back to College, as their jobs went overseas, and they were able to get retraining on the tax payers dime. But many of those in retraining I’ve spoken to, don’t see any jobs available upon graduation.
It’s a tough situation. While I’d agree there are many people who milk the system for all it’s worth, there are also many who are trying to find work, but are not being hired. Some are considered overly qualified.
A mall near me last month held a job fair. It wasn’t for just Mall employment, but for any Charlotte area companies hiring. It was mostly Fast Food and Retail. Over 10,000 people showed up for about 200 jobs. Do the math. The likelyhood of getting a job out of that many applicants is slim.
It’s easy to say just take a job, but in many cases there are not enough to go around. If you have a family, even if you get a low paying job, you can’t make ends meet on it.
(previous comment caught in the moderation queue, not sure why, no links in it)
Oh sure, there are a LOT of jobs going overseas. For example, about 15 years ago I worked as a design engineer building high-reliability switching power supplies for the telecommunications industry. I watched as *all* of the design engineering work was shipped to China and Eastern Europe.
The reason was pretty simple. Electronics design is basically physics. Physics works the same in Hungary as it does in the US. Engineers there get the same electronics training as engineers here. There is basically no difference where the circuit is designed. Hungarian engineers would work for about 25% of what US engineers would work for. Chinese engineers for about 10% at the time. The quality of the work was just as good and the cost was a lot less.
I also realized something else. The people who were installing, configuring, and maintaining that telecommunications gear (high end internet backbone routers and fiberoptics gear) were making more money (in many cases a LOT more money) than the people who designed it. A network engineer who is competent with BGP in the DFZ (default free zone, the part of the internet where there are no default gateways, everything has an explicit route, the part that interconnects the ISPs) could make more than twice the salary as the engineer who designed the hardware. Most importantly, that is NOT a function that could be shipped overseas.
It didn’t take long to realize that a career change was in order.
Just back from the only public hearing on Houston redistricting plans.
Sheila Jackson Lee’s district is being challenged while some argue that their own districts be left alone.
Sheila Jackson Lee and John Faulk provided their arguments regarding.
Kevin Brady and a few other council people were there to argue fair and ethical representation. But some members of the two joined committees were focused on the concerns over the Latino representation.
One senator from the committee (Stephanie Huffman) remarked about the largest crowd ever seen in a public hearing. It was standing room for a while until people started to leave.
The public hearing was scheduled for just one hour but I finally left at 12:30 and they still have a list of witnesses to listen to.
Here is the link to Texas Redistricting. Looks like right now all they have are current maps plus the plan for next year plus the goals of redistricting based on law.
Sorry, left out the link so here it is!
http://www.tlc.state.tx.us/redist/redist.html
I just can’t get over this racist liberal notion that a person can be represented only by someone who is the same race they are.
What is REALLY going on is that the Democrats constantly play the race card so when they say they want a district represented by some ethnic group they are really saying “by a Democrat”.
I agree that ‘part’ of the reason jobs go overseas is the payroll factor, but that alone is usually not enough. Tax benefits given to American companies for moving their plants and employees overseas far outweigh what an employee’s pay difference is.
Does anyone know when the Congressional White Caucus meets?
“Tax benefits given to American companies for moving their plants and employees overseas far outweigh what an employee’s pay difference is.”
That greatly depends. If a company is not profitable or just barely profitable, it has no tax worries. The payroll difference can mean the difference between making a profit and not.
A US company still pays US taxes on its overseas operations. The company pays taxes on its profit.
Now it can make sense to MOVE the entire company out of the country and many US companies are now contemplating moving the corporate HQ out of the country entirely. Many countries, for example, levy little or no corporate tax and little or no capital gains tax. They also have very low taxes on gains from venture investments.
There just isn’t any real reason for a company to have its HQ in the US when they get a better deal from Estonia or Slovakia.
(re-post, part 1)
Of course I agree that long term unemployment benefits are disastrous for the economy – this is the model that not so Great Britain has followed over the last several years which has now created a huge army of persons who never work and never need to, since they are guaranteed monthly checks and free housing for life. (crawling out from under that socialist burden is Britain’s greatest challenge)
But, as with any challenge, it has to be worked on from both sides of the equation. Motivating people to get out and look for work does nothing if new jobs aren’t being created, and we are deep in this recession and still we have no net new job growth. (In fact, we’re still losing jobs slightly, although we’re close to flatlining)
Why are we not creating any jobs? Because small business, the great creator of jobs in this country, is still too insecure about future policy to take any risks. Forget interest rates, that’s not why small businesses are founded and grow – they have to have confidence as to what the future business climate (future meaning 2 -5 years out) is going to look like and especially what future government policy is going to be, especially with respect to regulations and tax rates.
When a small business owner has no idea what’s coming next, but suspects it will be bad, then the universal response will be to hunker down, take no risks, and wait until some type of certainty can be had. No one is going to take a big risk to make income when the threat of punitive tax rates are right around the corner, or the threat of massively increased energy costs.
(tbc)
Bingo! Everyone is in “wait and see” mode regarding tax policy.
Many small businesses are taxed at the personal income tax rate if they are a sole proprietor. Take an automotive repair shop. You might have an owner with ten employees. His business income is his personal income. He might gross a million a year. He has to pay wages and his employees’ social security and disability out of his pocket. Same with health insurance requirements under Obamacare. He also pays his parts suppliers out of his pocket.
He isn’t going to expand his business not knowing what tax policy is going to be next year. This administrations failure to clearly communicate its policy is putting a huge damper on the activity of a lot of small businesses.