With Congressional Democrats in near-panic amid forecasts that unemployment will remain high through next November’s midterm elections, a party leader said on Thursday that the House will pass a new “jobs bill” before Dec. 18.
Senate Democrats likewise are weighing options. And the signals from Congress follow by a day the White House’s announcement that President Obama will follow his “Forum on Jobs and Economic Growth” on Dec. 3 with a “Main Street Tour” starting the next day in Allentown, Pa., and continuing to other hard-hit places in coming months.
With more than half of last winter’s $787 billion package of tax cuts and stimulus spending still in the pipeline, Representative Steny H. Hoyer, the Democratic majority leader from Maryland, said the new measure should not be called another stimulus bill.
“I don’t want it to be as broad as that,” he said. “I want it to be very targeted on jobs.”
He indicated that the legislation might include money for public jobs, which many liberals have advocated; tax credits to employers for new hires, an Obama campaign proposal that was shelved early this year amid concern that businesses might game their payrolls; and additional spending for infrastructure and road projects.
First, this is an overall good idea. With unemployment at 10.2% every little bit helps.
But it's also important to remember exactly what has happened in the economy and where we are in the cycle to understand exactly what is going on. And no -- the following is not an endorsement of bad times; it is simply an explanation of the facts without a judgment attached.
At the end of last year and the beginning of this year the US was losing jobs at a rate of 600,000/month. That lasted for 5 months. Or to put it another way, the US lost 3 million jobs in 5 months. That is almost half of all the jobs created during the last expansion. That tells us the severity of the economic situation was indeed severe. Employers simply cut everybody they could and then some. In addition, we have also learned that the BLS has added an additional 800,000 jobs losses to the official job loss total. These will be added in February. This further indicates we were in an extremely severe economic contraction.
Currently the economy is back from the brink. We printed a solid GDP number last quarter and the rate of job losses continues to decrease. In addition, the pace of initial unemployment claims continues to move lower. All of these facts tell us we're moving in the right direction. BUT -- and this is very important -- remember where we were last year at this time. There were a lot of people talking about depressions and deflationary spirals. These are the most severe economic events we can experience. The repercussions of these events last a long time.
Does this statement imply that I am unsympathetic to the unemployed? No. I have never advocated (and will never advocate) that we decrease or cut off unemployment benefits or show any less sympathy for those who have lost their jobs. That is not the point of the above recitation of historical facts. The point is things are moving in the right direction. Recoveries -- especially from near financial collapses -- don't happen overnight. As the article states we've only just started to use the stimulus money. We've just printed our first quarter of positive GDP growth. By this time next year things should be better.