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by The Real American

Created on: August 16, 2010   Last Updated: August 17, 2010

There have always been numerous misconceptions about Unemployment Benefits and their lasting positive or negative effects upon the economy. There are those who firmly believe that they are a godsend - to generate potential economic growth… and there are those who believe that they are a blatant governmental hindrance, just as strongly. Whereas, the truth is that, neither of these politically extremist views is [in anywise] correct regarding them. Unemployment Benefits are largely economically neutral due to several counterbalancing factors.

Since, under normal circumstances, our employers have been forced to pay them – as a Federal/State mandated condition of employment – employers have already worked them into their Benefit-Pay Scale Equations as a genuine labor expense. Therefore - just like: Paid Vacations, Health Care, and Retirement - they are just another part of an employees true compensation. Employers could have just as easily paid their employees significantly more in cash money and have left these problems up to the individual employees themselves – without any government involvement at all. All things being equal, the accounting and paperwork savings alone - would have benefited them substantially.

And yet, we are no longer living under normal circumstances and Extended Unemployment Compensation doesn’t function under the same rules. Extended Unemployment is paid at the public expense, either through: Federally Borrowed, Publicly Taxed, or Fiat Printed Monies. Consequently, these publicly expended revenues will impact the overall economy to some minimal extent. Governmental borrowing decreases available capital… Higher taxation decreases discretionary income… and Printing More Money devaluates the existent national currency supply. Whichever route the government takes – to offset such necessary spending – the results will be essentially the same.

However, the negative economic effects of Extended Unemployment Compensation must be counterbalanced against the negative economic consequences in not providing these same minimalistic societal supports. For instance:

1.)    People who can’t buy their own groceries will just apply for: Food Stamps, AFDC, and other socially funded programs – which are drawn from the very same national economy.

2.)    People who cannot make their mortgage payments will get foreclosed and add to the ongoing economic confusion.

3.)    Those who can’t pay their phone bills aren’t likely to hear from that perspective new employer.

4.)    Social Unrest requires more law enforcement personnel to substantially deal with it.

This list of negative consequences goes on and on, ad infinitum. Thus, any savings born off the backs of the workers is highly deceptive and tragically illusory for the politicians who’ll so foolishly attempt it. The time to eliminate such much-needed supports is when economic times are good, so that the working class can acquire the much-needed capital of their own to withstand the storms - which will eventually and invariably follow. You cannot impoverish the workers through massive national taxation during the times of plenty and then tell them to buzz off – when they need some of these funds to be later returned.

After all, the entire point of having a Social-Fascist Safety Net is supposedly to offset these very same economic troubles! Who - in their right mind - would buy insurance from a company that defaulted on their policies, every time they were needed to payout the partial refund of premiums necessary to settling a claim. Whether you like it, or not, changing the rules in midstream is a recipe for: Political, Social, and Economic Disaster of epic proportions. Just look at Greece, for a recent political example….

Whether the government chooses to offer these continuing societal benefits, or to greatly expand its resources to handle the growing civil unrest, the expenses will be largely the same. Although the unemployment rate always drops once unemployment benefits have been exhausted, this is merely a technicality - based upon the fact that governmental records are no longer being collected on these long term unemployed individuals. While the governmental figures may see a dramatic reduction in unemployment, the number of those out of work hasn’t changed [in any way] at all.

Moreover, Extended Unemployment Benefits are the most efficient mechanism currently available for dealing with the horrendous societal effects of an economy undergoing systemic upheaval and fundamental change. According to the Congressional Budget Office figures, TARP cost us $3.7 trillion on bailouts and generated 654,000 new jobs – before the economy started plunging again in July. With each additional new job – under that program - costing a staggering $5,657,492 to create, Extended Unemployment Compensation is a considerable bargain all the way around.

At that rate, it will take more than 125 years for each new job to generate enough paychecks to be worth over $5.6 million… and over 500 years of personal income taxes - for each individual - to repay the cost of this one idiotic program! Moreover, the corporate beneficiaries of these TARP monies were the very same individuals who created this mess to begin with. We have trillions to spare for America’s biggest criminals, but a few billion for the lowly workers suffering from their still ongoing crimes is to be considered too much to spare. Call me crazy, but something is wrong with that entire ethical concept.

The truth is that the Modern Corporations now fleeing America’s shores have never paid any taxes – during the course of modern history. They either: raise their prices on consumer goods, cut their employees pay and benefits, or blackmail the various Cities and States into tax incentives and just move again as soon as they expire. Meanwhile, everyone else has to pick up their financial slack, through: overly inflated prices, continual pay or benefit cuts, and ever-higher property taxes. Modern Corporatism isn’t True Capitalism and the differences aren’t even that close!

The underlying economic problem is one that has been created through governmental and corporate collusion. The Average American Worker has lost 70 percent of his employee compensation since 1970 – as adjusted for inflation, over that forty-year period – while their taxes now take up a full 70 percent of what they make. Meanwhile, all of those additional taxes are only necessary to subsidize the growing number of workers now fully eligible for: Welfare, Public Assistance, and Food Stamps. That’s the dirty little secret that everyone in the media continually fails to mention!

The reason that American Goods are now so expensive to purchase isn’t due to the high costs of American labor. After all, American labor costs have gone down tremendously since their watershed moment of 1969. Moreover, American technological efficiency has actually increased by over 600 percent, during the very same periods of time. The ultimate causes have always been: our ever-increasing taxation, aligned with its counterpart of modern corporate greed. One hand has been washing the other for decades and we have been inadvertently supplying the soap. Meanwhile, both sides have been simply blaming “Inflation.”

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