Editore"s Note
Tilting at Windmills

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September 16, 2010

UNEMPLOYMENT INSURANCE KEEPS MILLIONS OUT OF POVERTY.... A new report from the Census Bureau points to a painful, ugly 2009 for those struggling to get by. The poverty rate jumped to 14.3% last year, its highest level in 16 years. As CNN noted, there were 43.6 million Americans in need -- "the highest number in 51 years of record-keeping."

If you're thinking it seems obscene that the biggest fight in Washington right now is over whether to give the rich yet another round of tax breaks, on the heels of a 14.3% poverty rate, then you and I are on the same page.


But as heartbreaking as the Census data is, it's worth remembering that government spending prevented it from being even worse. The Center on Budget and Policy Priorities' Arloc Sherman reports today that an analysis of the new survey data "shows that unemployment insurance benefits -- which expanded substantially last year in response to the increased need -- kept 3.3 million people out of poverty in 2009."

Sherman added, "In other words, there were 43.6 million Americans whose families were below the poverty line in 2009, according to the official poverty statistics, which count jobless benefits as part of families' income. But if you don't count jobless benefits, 46.9 million Americans were poor."

And this is just UI. It's hard to calculate, but imagine what the poverty rate would have been without the Recovery Act, too.

Just to be clear, I'm not saying the Census numbers should be seen as "not that bad." I believe the opposite -- it's a national tragedy. I also believe, however, that it's worth emphasizing that government intervention -- with spending that Republicans found offensive -- prevented an awful situation from being even more drastic.

Indeed, in a political context, let's also remember that, as far as many Republicans are concerned, unemployment insurance benefits shouldn't even exist. Nevada's Sharron Angle believes the benefits "spoil" the jobless; Alaska's Joe Miller believes unemployment benefits are unconstitutional; Kentucky's Rand Paul thinks it's time to cut the jobless off before we're worse than Europe; and a wide variety of Republican lawmakers have said the aid to the unemployed is encouraging laziness.

These same Republicans will be outraged if tax rates for millionaires expire on schedule. The GOP has its priorities.

Steve Benen 3:25 PM Permalink | Trackbacks | Comments (11)

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The GOP are doing a fine job of re-branding themselves as country club politicians with Boehner leading the way.

Posted by: mikefromArlington on September 16, 2010 at 3:31 PM | PERMALINK

Without my wife's unemployment insurance, my income would not be sufficient to pay the mortgage, utilities, + still afford such luxuries as food. According to the GOP, that makes us malingerers.

And, according to my wife + I, that makes the GOP a bunch of smacked asses.


Posted by: Zorro on September 16, 2010 at 3:33 PM | PERMALINK

"And this is just UI. It's hard to calculate, but imagine what the poverty rate would have been without the Recovery Act, too."

Here's something a little more alarming: Imagine what the poverty rate will be once the people from that red "'09" bar all start hitting 99 weeks.

Posted by: mcc on September 16, 2010 at 3:42 PM | PERMALINK

My local paper, in a VERY conservative district (CA-50, Bilbray), prints all letters; one every 2 weeks under 200 words :

Imagine you had a new product; where would you build your factory? Imagine you had an extra millionbux to invest in an enterprise; wouldn't you push for greater return with cheap foreign manufacturing? So where's the link that tax cuts make jobs? Hey, if that person with the extra income buys foreign products, a Mercedes car, for example, their tax cut worked exactly opposite of the Republican mantra. That tax cut shorted America while simultaneously sabotaging American industry.

A real example : Darrel Issa, the richest congresscritter, made his money with products manufactured overseas. The NCTimes won't let me say he drives a Mercedes, even though I cited multiple past articles, confirmed by their editor, mentioning his Mercedes, but they were dated. Repeated calls over two years to his office have been unfruitful. Therefore, I am compelled to speculate.

So let me speculate. If Darrel Issa, wealthy from overseas manufacturing, votes himself an undeserved tax cut, spends it on an up-scale foreign car, well, gosh, he ain't no good at all to America. The only good thing he did for America is pay the sales tax on that foreign stuff.
Tax cutting is the least stimulative policy available to government.

Posted by: Richard W. Crews on September 16, 2010 at 3:44 PM | PERMALINK

another 200 word letter :

Social Security isn't broke; fully funded until 2037. A permanent fix is easy; just tax all income. Presently, income above approximately $102K/yr is not taxed. This is completely backwards. If all income was taxed, the rate itself could be lowered; a tax break for everyone. If upper incomes are taxed, the lowest incomes could get a tax break, perhaps the first $15K/yr not be taxed.
A means test will shore up Social Security. People with an income over, say $250K/yr, or have assets of around 3-5 million dollars shouldn't receive SS payments. It's insurance mainly against a poor old age. Sure, some will yell about paying in without receiving anything back - but it's insurance. We pay auto insurance for years and hope to never use it.
The estate tax should have a disbursement level where multiple recipients aren't taxed up to around $5M. Remember, the tax is on the recipient, not the deceased. It's up to the estate to distribute the wealth, managing the tax. The estate tax is responsible for people building hospitals, museums, cultural and philanthropic organizations. America prides itself on a meritocracy, and a billion dollar estate passing hands endlessly is an aristocracy opposite America's self-notion.

Posted by: Richard W. Crews on September 16, 2010 at 3:46 PM | PERMALINK

In my meager understanding, the majority of unemployment insurance money comes from employers. (Up to $56.00/year per employee goes in, states collect and distribute). States borrow from Feds when account runs short, but not all states are borrowing at this time.

That huge rise in the chart could be mostly explained by the rise in *unemployment* itself, and therefore the numbers receving UI, rather than from some huge *expansion* (extension) of UI from our putative saviors, Dem politicians. (But I could be wrong, maybe the cash going to fund the *extension* dwarfs the amount already spent by the standard UI program. But I doubt it).

But I agree on the more basic point that helping those outta work is an example of good things govt interventions can do. (IMO, UI should be handled by the govt entirely, from the general fund, not from taxes on employers levied per worker).

Posted by: flubber on September 16, 2010 at 3:55 PM | PERMALINK


...which is exactly why the Replicants hate it. You can't get enough people to work at serf wages if not enough of them are desperate.

Posted by: Cap'n Chucky on September 16, 2010 at 4:03 PM | PERMALINK

There's an "email" going around Facebook right now that is an alleged open letter from an ER doctor to President Obama. It tells the story of having to provide ER services to a woman "with tattoos and a lot of bling" who is listed with the hospital as a non-payer. The righteous indignation that this "doctor" expresses — that a woman would have tattoos, bling, beer on her breath, and a diet of nothing but fast food — is palpable. The sentiment is simply "why should I have to pay for healthcare for this lady who is rich enough to have 'bling'?"

Of course, the real message is that a rich white doctor doesn't see the need to help a poor black lady. And the comments from conservatives about how black ladies with bling, who won't eat right and pay their doctor bills, are precisely what's wrong with America.

So, no. Don't look to any Republicans to lend any kind of hand to the unemployed. Unless you're an immediate family member, unemployed equals black equals welfare to these people. As far as they're concerned, our president is a black Muslim communist currently on welfare.

Posted by: chrenson on September 16, 2010 at 4:18 PM | PERMALINK

LINCOLN'S Gettysburg Address rewritten by Republicans and Tea Partiers, finale...
"... that from these honored dead we take increased devotion to that cause for which they gave the last full measure of devotion—that we here highly resolve that these dead shall not have died in vain—that this nation, under God, shall have a new birth of freedom—and that government of the wealthy, by the wealthy, for the wealthy, shall not perish from the earth."

YET, being against the Federal Government, perhaps something from Jefferson Davis might be more apropos:

     “[Our situation] illustrates the American idea that governments rest on the consent of the governed, and that it is the right of the people to alter or abolish them whenever they become destructive of the ends for which they were established.”

Posted by: KurtRex1453 on September 16, 2010 at 4:25 PM | PERMALINK

"...IMO, UI should be handled by the gov't entirely, from the general fund, not from taxes on employers levied per worker." flubber @ 3:55 PM.

I understand that the present system was put in place to prevent employers from laying off/firing workers as a short-term economy measure; ie, business is going to be slow for a few weeks, so the factory management "lays off" 25% of the work force. The workers then receive local or state "assistance" to tide them over.
In effect, the factory owners were getting local and state charity agencies to provide an income for those workers, who would return to their jobs as soon as business picked up. However, the monies for those agencies came from the entire tax base and not just the employers, thus the local and state authorities were subsidizing the factories' bottom lines. Employers attempted to game the system, got caught, and have been paying for it ever since.
I have insurance on my house, car and possessions, as well as auto and homeowner's liability insurance. I imagine UI is considered a form of "liability" insurance and is, undoubtedly, deductible as a business expense.

Posted by: Doug on September 16, 2010 at 9:29 PM | PERMALINK

Let's not forget the other headline from the Census report: "the number of people without health insurance coverage rose from 46.3 million in 2008 to 50.7 million in 2009."

"The number of people with health insurance decreased from 255.1 million in 2008 to 253.6 million in 2009. Since 1987, the first year that comparable health insurance data were collected, this is the first year that the number of people with health insurance has decreased."


Best health care system in the world my left....foot. Reform can't come fast enough - literally - for millions of people yet all some can scream about is extending the Bush tax cuts for those making over $200K. Thank you Banana Republic-ans!


Posted by: Bob on September 17, 2010 at 6:42 AM | PERMALINK



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