The Catastrophic Effects of Longterm Unemployment Are Already Starting

IMG_0094Longterm unemployment is one of the biggest problems facing our country yet no one mentions it. The media hardly covers the situation. President Obama mentions it in passing but hasnt done anything since a half hearted Jobs Bill in September of 2011. John Boehner, Harry Reid, Nancy Pelosi, Mitch McConnell never talk about or suggest more ways to get people back to work. According to The Wall Street Journal the amount of people who are longterm unemployed hasnt been seen since the Great Depression and the length of  time these people are unemployed is unprecedented, even worse than the 1930s. The unemployment rate is dropping because people are giving up and dropping out of the workforce. Last month it was 300,000; the month before it was 800,000. We have the lowest workforce participation in generations. Yet all of this is ignored while the GOP plays hostage taking games with defaulting on the U.S. debt. When they tried the same stunt last year it drastically slowed the economy, slowed hiring and added to the deficit since more people were laid off and fewer people found jobs. I actually dont blame the entire GOP; I put direct blame on the tea party. Their unwillingness to come to a Grand Bargain is one of the sources of the dire state of hiring. I do believe the party leaders, like John Boehner and Mitch McConnell and others would strike a compromise for a Grand Bargain. But the tea party won’t vote for it so the party leaders are stuck. The irony, of course, is that the tea partys goal is to lower spending, but their actions make the government need to pay and borrow more because all of this posturing and uncertainty makes companies hire fewer people.

There were two disturbing articles in todays papers that reflect the effects of longterm unemployment.  The Washington Post ran a front page story on how Americans are draining their 401k and IRS accounts; I know and have been in contact with many on twitter who have done the same. This is because there is no financial help from the government after 99 weeks and more than 10 million have been unemployed longer than that. The second article, on the front page of the New York Times stated how more and more people are going deeper and deeper into debt. This I also attribute to people running out of money, the longterm unemployed who cant find jobs are running out of money. Both of these articles show the start of what could be a complete catastrophe in the coming years and decades for the United States. What is going to happen to these people once they run out of their IRA and reach their credit limit? The answer to that question is extremely scary and something that is not talked about in the media, its ignored in Congress and by the president. There was another recent article I read in WSJ that said that if stimulus was provided for enough people to get back to work and raise GDP by just 1% point, costing maybe $400 Billion, the taxes from those people working would save the U.S. Treasury $4 Trillion over 10 years. Thats staggering, yet its ignored.

What needs to happen is action. Our paralyzed government needs to actively help longterm unemployed people get back to work. People who are longterm unemployed dont want to have to live off of government support, no one does. They want to work, bring home a paycheck, bring purpose back to their lives. It is in our reach to create programs, tax incentives, stimulus, whatever it takes, the goal of getting these people back to work is attainable. As I have said before, in my view the tea party with their non compromising actions are treasonous; I would like to see them criminally prosecuted for deliberately tanking the U.S. economy. Threatening default, something that has never happened in the history of this country, is a criminal act. Working out a Grand Bargain is what should be done. All of this bickering is a waste of time. They need to sit down and get the job done. Every day that goes by thats wasted with threats is another day another longterm unemployed person takes money out of their IRA, goes deeper in debt to buy food that they cant afford.

Fast forward 20 years from now. If nothing is done to help these people this country could be littered with homeless people, more violence from people who are angry at the world, or people wanting to feed their families. Or we really could become a welfare state and government spending would have to skyrocket to help these people who went from longterm unemployed to destitute. No one wants to see that happen. The financial and psychological effects of longterm unemployment are disastrous.

You have 25 million people who are unemployed or under employed; you have more than 10 million people who have been out of work for over two years. They all want jobs. We are the richest nation on earth with the worlds largest economy. We have the resources to help the longterm unemployed find work. Now we need the will of our government to take action.