SOLUTIONS FOR UNEMPLOYMENT
A well-known politico commented recently that she did not know any economists who are against continuing extension of benefits to the unemployed. This is because there is historical evidence of the efficiency of this particular form of economic stimulation, which pumps money into the system quickly and avoids the greater harms caused by allowing the unemployed to slip closer to the edge of economic and health disasters such as bankruptcy, malnutrition and exposure. There has been some question about the logic of the Senate's rejection of the most recent unemployment benefits extensions. Perhaps they are concerned that any efforts to relieve the suffering of the unemployed will be viewed by some as an unnecessary increase in the national debt. It is more probable that Senate Republicans are more concerned about upcoming reelections than anything else. Still other economic voices argue that without this crucial economic stimulus, we will enter a secondary phase of recession which diminishes our recovery efforts and further prolongs the misery and frustration of those who are most in need.
In an effort to stimulate job creation, banks have been given access to $15 billion in funds to make cheaper loans to small businesses who will agree to the creation of more jobs in exchange for lower interest rate loans. This is a step in the right direction, but will take longer because of the reluctance of small businesses to incur debt in such an uncertain business climate. Another approach which could be tried is to reduce payrolls nationally by 10%, and use that same 10% savings to hire the unemployed, which now represent about 10% of the nation. Employees who complain about the reduction of their income to 90% could be encouraged to show the same compassion for their unemployed neighbors as they would like to be shown to them under the same circumstances. If this logic fails to convince them, perhaps offering them an opportunity to exchange places with their less-fortunate neighbors would be more appropriate.
Whatever solutions ultimately prevail, this continues to be a learning experience more keenly felt by those recipients who have had the least to gain and the most to lose, through no fault of their own, since the Great Depression. Rather than bemoaning our sad fate as a nation, why not find a practical way to move forward and turn our dilemma into a fair solution which works now and sets a good historical example for generations to come?
Mark Overt Skilbred
