Update on America's Economy and 2010 Unemployment Extension Bill

Update on America's economy and 2010 unemployment extension bill reflects that job creation goals are not being met, according to the Wall Street Journal and ABC. In addition, unemployed numbers are growing, the deficit continues to be a growing concern, and the overall economy remains dismal, according to the WSJ, ABC, Boston.com and other news sources.

Overall Economic Picture Update: Economy Getting Bleaker?

Nigel Gault, chief US economist for IHS Global Insight told ABC that the June Jobs Report just released by the federal government is not one that sparks optimism at all.

"All the details are telling us clearly that growth has slowed down and we're still at the moment very uncertain just how much; this is indeed fragile," Gault said.

Which details, exactly? Gault says that the details include the length of work week, the hourly earnings of workers, as well as the unemployment numbers all play a role.

According to this economist, a reduced work week shows employers are needing their employees less, not hiring more workers, as government had hoped.

Additionally, lower hourly earnings reflect a company is further downsizing by reducing pay, not handing out raises. And although the unemployment rate fell from 9.7 to 9.5 percent, it is not an accurate picture of unemployment, since the rate decrease is the result of people stopping their job search--but not because they found a job.

Unemployment Rate Drop in June: a False Reading

If the unemployment decrease from 9.7 to 9.5 was a result of out-of-work individuals finding gainful employment, it would be cause for celebration and an indicator the economy was recovering. But, instead, discouraged and out-of-hope job applicants have become so frustrated in their job searches that they have, inadvertently, caused the unemployment rate to reflect a decrease as they exit the entire process.

"And then if we look across at the unemployment rate, it looks like good news--the unemployment rate fell to 9.5 percent from 9.7. But unfortunately it fell only because the labor force dropped even more than employment--some people who had been previously looking for work, gave up," Gault reiterated.

This rate decrease in unemployment, according to Gault, is then not an accurate reflection of unemployment and can't be used to bolster any political party's claim that 'unemployment is being reduced.' It is only a measure of how many people are stillattempting to find work, not necessarily a measure of how many are really still unemployed.

According to economists, it is estimated 652,000 such people just gave up searching for a job altogether in the month of June, per Boston.com

Economy Going Into Double Dip?

With work hours decreasing, pay rate decreases, and unemployment numbers on the rise, some believe the economy will go into a double dip, according to some economists. But Gault disagrees.

"My view is the most likely outcome is clearly a slow down in the [economic] growth rate--that's not the same thing as a double dip," Gault said.

"Double dip would mean we go into reverse and we actually start to contract [decline] again. I don't think the evidence is there yet," Gault added.

Job Creation Update

One temporary fix in the job market was the creation of 225,000 temporary census bureau jobs. That creation impacted job creation numbers, making it appear that unemployment was decreasing the past few months, and it was; albeit temporarily.

But all of those 225,000 census jobs, which were paid for with stimulus money, weren't permanent. And they ended in the month of June, as expected. Therefore, that aspect of job creation was only a bandage for 225,000 unemployed Americans. Those people are now joining others on the current unemployed list.

In more recent news, it has become public knowledge that as much as $33 billion dollars of job creation fund monies from the approved $862 billion stimulus bill of last year remained unused.

In fact, the republicans in the Senate sought to apply those funds for use immediately in addressing the needs of the unemployed in the unemployment extension bill seeking passage before July 4th. However, democrats in the Senate objected to the use of said funds for that purpose, citing the need to borrow more money instead.

Is the American Deficit Growing?

In an NBC/Wall Street Journal news poll conducted recently, 63 percent of American voters were calling for Congress to keep down the ever-growing deficit and use the largest stimulus bill in history to pay for needed economic growth and unemployed extension needs.

President Obama want to increase the deficit, according to Boston.com, but in another poll conducted by WSJ and ABC, 50 percent of Americans voiced disapproval of the way President Obama is handling the economy, with only 46 percent supporting his current methods and growing deficit ambitions.

Democratic consultant Vic Fingerhut said Democrats had to make a choice in regards to some democrats saying that they wanted to grow the deficit, "They can have a big deficit with high unemployment--which is what they have--or a high deficit with low unemployment."

As America continues to borrow from foreign entities to feed its need to hand out millions to other countries, more and more Americans are growing weary of the tax burden it is exacting on them.

And the unemployed in America have voiced, quite loudly, their desire to see American constituents served by governmental aid before citizens of other countries.

Unemployment Extension Bill Update

As of July 3, 2010, the Congress remains at an impasse on the highly controversial funding issue of the unemployment extension bill. Republicans wanted to use funds already sitting in the Congressional coffers to pay for this immediately needed bill; democrats want to wait until after the vacation and force the legislation through on their terms: by borrowing more money and increasing the deficit.

When it boils right down to it, an unemployment extension bill using available stimulus dollars should have been crafted by Congress and voted 'Yea' on by both the House and the Senate before the July 4th break. Repubs said they would sign it immediately; Dems said the bill was needed immediately. But Dems refused to do it.

Congress Produced an Inept Bill to Begin With

There was no need to craft a bill requiring Congress to borrow money it already has. That was an inept and judiciously irresponsible bill to put forth by the members of Congress.

How can anyone in Congress put forth that kind of bill in good conscience when none of the job growth or unemployment decreases have materialized after $862 billion dollars of debt was approved last year? Why would Congress expect Americans to borrow more money when they still have the stimulus money to use?

Unemployed Americans remain the victims in this drawn out saga and impasse. Stimulus money they voted for last year sat at the ready to be used in their time of need. Republicans said they would use that money immediately to help the unemployed, as they should; Democrats said it doesn't work that way, that America needed to borrow more money to fund that bill.

The unemployed was forgotten in the debate in Congress and left to go penniless over the Independence weekend as Congressional members took vacations on the taxpayer dime. The 2010 unemployment extension bill lies in wait for a re-vote after Congress' recess. Let's let the children have a permanent recess, shall we?

Source
ABC
Boston.com
Wall Street Journal