Why doesnt the government limit unemployment to a few months and then create various manual labor jobs instead so they atleast get some value for their money? am i missing why this is worse then just giving money for nothing?
A. That would require common sense, which ain't too common. B. You're demanding self-actualization and financial responsibility from people who are incapable of either. Be they congress-critters or recepients of said beneficence.
You might want to think this through a little more. What happens to all those houses when the mortgage doesn't get paid? As if the supply of homes wasn't big enough already. Unemployment is an extremely important circuit breaker, or shock absorber for the economy. If these extensions keep getting denied things are going to get a lot worse. With 20/20 hindsight we can easily conclude Smoot Hawley caused the Great Depression. We may be able to look back with similar hindsight someday and say the denail of unemployment extensions caused the Greater Depression. Unemployment benefits come out of my tax dollars and I'm a srong supporter of extensions. Ten to fifteen million people with no income is going to have a massive ripple effect if it were to come to that.
I guess no one sees the obvious. Perpetually extending unemployment benefits creates a captive, yet entirely dependent group of voters who will always vote for the party that promises to extend their entitlements. As the numbers of unemployed and disenfranchised continue to mount, the larger the percentage of the population that will become dependent on these neverending handouts, whether that be welfare, unemployment benefits, assisted health care, guaranteed pensions, etc, etc...
This is just an experiment, a game of chicken to see if the unemployed start looking for work if they think their checks are ending. The Feds will be watching the weekly unemployment data closely to see if this works. If not they'll pony up the funds pretty quick. 15 million desperate people will be a Mad Max scenario.
If the mortgages dont get paid, we'd finally get a reset to more realistic housing values. Why is it that so many individuals think this is the end of the world. I know why...because it's a generational war. The generation that benefitted from asset inflation, whose $105,000 ranch house is now worth $500,000 will do and vote for any policy which can preserve this artificial value, no matter the costs to the larger economy or upcoming generations (or those who might possibly lift their offers). The reality is the biggest burden for any wage earner who had to actually buy all of this overpriced crap real estate is his mortgage, the assessments and the property taxes. Is it any wonder why a good chunk of the population just had a collective "f*** it" moment these past two years when they were stuck with a massive mortgage payment on a house that declined in value...Is it also any wonder how, out of nowhere, this economy has still got a small bit of life left with a trickle of consumer spending out there? Take away that massive burden of having to make those hefty mortgage payments and property taxes and suddenly people CAN take on work for a fraction of what they demand currently. It's this ass backwards mentality of preserving artificially high asset values that has put us into this mess of looking to bailout this and stimulate that, all the while we just rack up more and more unsustainable debt and do nothing to address the affordability problem in the first place.
Under a normal unemployment situation I would agree with you but this is anything but a normal situation. It's pretty easy to say, "just get a job." There ain't none.
I couldn't agree more. Houses should be left to fall to their intrinsic value but that would trigger TARP 2.0 with an attitude. Either way you cut it the government will have to bail someone or something. The only thing that is going to fix this economy is time. Between then and now the government has to keep softening the blows or something will implode.
There's nothing ass backwards about it. It's actually quite straight forward. If a bank has a note on a $500,000 house that was purchased with 10% down and that house falls to its true value of $200,000 we have a $250,000 problem. I know you know all this but now multiply that by another 15 million households and things get ugly for the banks pretty quickly. There is a reason the FED is keeping rates at zero "for an extended time," buying worthless assets from the banks, and the government is extending benfits. How many people are on food stamps? 37 million and counting? I agree with EMR. This is an experiment. If it fails those bennies are gonna keep rolling.