The pundit class is so desperate to put a happy spin on the nation’s faltering economy they have resorted to this: toilet paper.
Forget tea leaves. Now we are told the state of the economy can be divined by the shift in consumer purchases from one-ply to two-ply—and even three-ply!—toilet paper. The more ply people buy, the better the economy. Clearly then, we as a nation are on a roll.
America’s 27 million jobless also see the economy in terms of toilet paper. But they’re not counting the number of tissue layers.
In May, some 6.8 million U.S. workers were out of a job for 27 weeks or longer, up from 4 million a year ago. More than 250,000 people a week are losing their unemployment benefits, according to the National Employment Law Project (NELP).
So, what is Congress doing about it?
First, the Senate went on vacation over Memorial Day without extending unemployment insurance (UI), although the House had passed such a bill. Now, lawmakers are twisting in the wind, engaged in useless debates between approving desperately needed funds for jobless workers and lowering the deficits.
(Call the Senate NOW and tell lawmakers to take action. The Senate is considering a version of the House-passed American Jobs and Closing Tax Loopholes Act that would extend UI and COBRA health assistance for long-term jobless workers, provide relief for cash-strapped states, create or save a million jobs and stimulate our economy away from a double-dip recession. Call NOW: 877-442-6801.)
As Dean Baker, James Galbraith and other economists have pointed out—again and again—a false dichotomy has been created between the nation’s need to spend money to shore up jobs and the need to cut funding to lower the deficit. Focusing on reducing the deficit now with nearly 10 percent unemployment is “bad economics,” writes Baker. Short-term spending—extending UI, funding states to save or create jobs—is essential for the nation to emerge from the current disastrous jobless mire.
The country needs deficit spending to sustain demand until private demand recovers from the collapse of the housing bubble….The deficit hawks are not concerned about national insolvency; they are not worried about soaring inflation; they are worried about how to take every last penny from ordinary workers and give it to the Wall Street crew.
If Congress fails to act on the jobs bill and allows federal UI to expire, 8.2 million workers will exhaust their benefits by the end of 2010. Meanwhile, Congress needs to move on job creation—because the private sector is not. Only 21,000 private-sector jobs were created in May—and we need around 350,000 jobs created each month to make a dent in the unemployment rate.
At a recent Economic Policy Institute (EPI) forum, Harvard economics professor Raj Chetty said the median unemployed worker had almost no cushion—only about $250 in liquid savings—at the time of job loss, resulting in a sharp drop in spending on essentials, including food.
Economists at the same forum pointed out how money in the form of unemployment insurance is quickly returns to the community, effectively supporting local economies. And a new Harvard study shows growth in employment is key to sustaining a housing recovery.
Congress needs to acknowledge, ASAP, the choice isn’t between short-term spending or deficit reduction. The choice is between shoring up the nation’s economy by providing relief to its suffering constituents, or flushing the economy-and the workers who built it-down the toilet.