When the U.S. Bureau of Labor Statistics issues its February unemployment report on Friday expect more bad news.
My back of the envelope analysis projects that employers eliminated almost 700,000 jobs in February which will cause the unemployment rate to rise to 8%, the highest rate since the recession of 1981.
In January 2009 employers slashed 598,000 jobs. It was the worst monthly job loss since December 1974, and brought job losses to 1.8 million in just the last three months, or half of the 3.6 million jobs that have been lost since the beginning of 2008.
The job loss since November is the biggest 3-month drop since immediately after the end of World War II, when defense contractors were shutting down for conversion to civilian production.
January's job loss caused the unemployment rate to rise to 7.6%, its highest level since September, 1992.
As bad as the unemployment rate is, it only tells part of the story for people struggling to find jobs. The January report also showed that 2.6 million people had been out of work for more than six months, the most long-term unemployed since 1983.
And that number only counts those still looking for work. The so-called underemployment rate, which includes those who have stopped looking for work (discouraged workers) and people working only part-time that want full-time positions, climbed to 13.9% from 13.5% in December. That is the highest rate for this measure since the Labor Department first started tracking it in 1994.
Despite these gloomy number Wisconsin Congressman Paul Ryan (R) continues to oppose efforts to jump start the economy.
Ryan voted in lock step with his Party in opposing the stimulus package that provides help to the unemployed and their families by increasing unemployment benefits and food stamps and expanding eligibility, increasing Pell Grants, and investing in job creating infrastructure projects and education. Ryan's fiscal conservatism, incidentally, is new. When his Party was in power he voted for the 2001 and 2003 high income tax cuts which caused more than 50% of the Bush era record deficits.
Instead of voting for legislation that helps unemployed workers and their families, Ryan has waging war against an imaginary boogie man, stagflation that even he admits does not currently exist.
Nouriel Roubini, the NYU economics professor know as Dr. Gloom because he correctly predicted the current recession more than a year before it began, argues, contrary to Ryan' imaginary stagflation, that without even more aggressive federal action "this ugly U-shaped recession may turn into a more virulent L-shaped near-depression or stag-deflation (a deadly combination of economic stagnation and price deflation like the one Japan experienced in the 1990s after its real estate and equity bubbles burst."
Ryan has also criticized the President's proposed budget. "If there's anything that economists on the left and the right agree on, that supply-siders, classic economists and Keynesians agree on, you don't raise taxes in a recession," said Rep. Ryan. "This budget is raising taxes in a recession." Ryan was joined in his opposition by among others the American Petroleum Institute, the oil industry's most powerful trade group.
Ryan is either badly misinformed or deliberating misleading the public.
The economic stimulus package signed into law by Obama last week enacted one of the largest tax cuts ever, which made good on Obama's campaign promise to cut taxes for 95 percent of Americans. The first benefits from these cuts should be seen no later than April 1, 2009.
Obama has proposed increasing marginal tax rates on the richest 5%, people earning over $250,000 annually, and on hedge fund executives who have used tax loopholes to pay lower rates than middle income Americans. As Office of Management and Budget Director Peter Orszag said, "Folks need to actually look at the budget document." To avoid raising taxes during the recession, these increases will not take effect until 2011.
The ranks of the unemployed are growing. People in Wisconsin are losing their jobs, their healthcare and their homes. It's time for Congressman Ryan to worry less about imaginary problems and phantom tax increases and devote his attention to the real problems facing Wisconsin's increasingly beleaguered working families.
5 comments:
It is certainly the case that long term unemployment and underemployment are tragic and worthy of consideration by our elected leaders.
But I for one am not convinced that a no vote on the stimulus is tantamount to not caring for the unemployed.
Maybe Ryan thinks there is a better way to create jobs than a massive spending program that doesn't even meet the definition of good stimulus (timely, targeted, and temporary) of at least one of his own advisors.
Regarding the Bush ear record deficits - I have seen some reporting that future Obama deficits will be on par with Bush's.
The fact that Bush got there through tax cuts and Obama will get there through spending seems unimportant. In both cases we will be worse off - Please note this was an aside of my own and not a defense or Ryan, whose refusal to cut spending while raising taxes is indefensible.
Thanks.
This is all based on the erroneous assumption that the "stimulus" package is just that. Which it's not.
where to begin...obama and bush deficits may be similar in size, however there are very important factors to consider which differentiates the two. Bush's deficit came from two misguided wars and tax cuts to the rich, neither of which benefited the country. Obama's deficit is based on getting us out of the high unemployment, loss of homes, and the current economic crisis that he inherited. By spending on programs for job creation, he is creating a system that will pay itself back through increased revenues, not just draining the public coffers to benefit those in the top 2% income bracket. and zeus...don't think it is quite worth digging in to your comment, since you obviously are confused on what a stimulus package is.
Zeus - huh?
Anon - Thanks for the thoughtful response, but I remain unconvinced.
While I may not agree, I understand that some smart people believe the short term deficits we are running up will create jobs and foster economic recovery as you note.
However, what about 2012 and beyond? The stimulus is over, Iraq has been drawn down and yet we run deficits that, as a percent of GDP, are on par with Bush. So again, why is 'draining the coffers' to spend any better than draining them to benefit the very wealthy? I just don't get it.
If his plan really does increase revenue as you claim, then why the persistent deficits? Because he continues to spend more money than he takes in? How is this good governance?
The war was a bad idea not because of the deficits it caused, but because people died for no recognizable gain in our national security.
Michael Rosen - I am new to blogging so if it is considered rude for people to hi-jack your blog via the comments I apologize. It feels a bit like two strangers having a political discussion at a third person's kitchen table. But perhaps this is an old-fashioned way of thinking.
Jeremy,
No prblem initiating or joining the discussion. The dialogue is useful for all of us.
I plan to respond to your concerns as well but have been traveling for work and have very limited computer access.
I will attempt to respond as soon as I can grab the computer time. Bt don't hesitate to write. Thanks
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