3.3 Million Things Wrong with the House Unemployment Insurance Bill

December 14, 2011 at 5:31 pm

We released an analysis today of what’s wrong with the unemployment insurance (UI) provisions of the bill that the House passed yesterday to extend the payroll tax cut and federal emergency UI through next year.  New numbers from the Department of Labor (DOL) put a human face on that analysis — actually 3.3 million faces, because that’s the number of people who would lose unemployment benefits under the House GOP plan compared with what would happen if Congress extended current law.  The table below provides DOL’s state-by-state figures.

The House bill would sharply reduce the number of weeks of UI benefits available to the long-term unemployed, even though jobs remain scarce and long-term unemployment remains at unprecedented levels.  The bill also would institute numerous permanent changes to the UI system  that would not only make it harder for workers who lose their jobs through no fault of their own to qualify for benefits, but also make the system more costly to administer.

Among other things, the bill would deny UI benefits to all workers who lack a high school diploma or GED certificate and are not enrolled in classes to get one — even though employers would still pay UI taxes on the wages paid to these workers and those taxes would effectively come out of the workers’ wages.  It also would allow states to drug-test all UI applicants and condition eligibility on the results — a standard not used for other federal programs ranging from farm price supports to tax subsidies.

And it would allow states to get waivers to institute policies that would use UI funds for purposes other than paying benefits, thereby undermining the fundamental purpose of UI since it was established in the 1930s:  providing financial assistance to workers who lose their jobs through no fault of their own while they look for a new job.
3.3 Million Jobless Workers Would Lose UI in 2012 Under House Bill

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More About Chad Stone

Chad Stone

Chad Stone is Chief Economist at the Center on Budget and Policy Priorities, where he specializes in the economic analysis of budget and policy issues. You can follow him on Twitter @ChadCBPP.

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4 Comments Add Yours ↓

Comments are listed in reverse chronological order.

  1. 1

    Under a debt-free money system, all new money would be spent into circulation interest-free instead of loaned into circulation at interest. This is just common sense. If the government can issue a dollar bond, it can issue a dollar bill. Both have the same backing. The only difference is that one bears interest, the other doesn’t; one serves the banking elite, the other serves the general public.

    There are many ways to implement such a reform. The one I prefer is to peg the debt-free expansion of the U.S. money supply to the consumer price index (or something similar) — that way, if the price level began to rise, the law would require (1) a moderate decrease in the percentage of government spending that comes from newly issued Treasury currency, and (2) a proportionate increase in the percentage that comes out of tax revenue. If the price level began to fall, the law would require the reverse.

    As the resultant decrease in the public debt freed up an increasing percentage of the $200+ billion wasted every year on interest payments alone, and as the resultant boom in prosperity increased the tax base, tax revenues would soon exceed overall expenditures, thereby creating a real budget surplus (as opposed to the phony, “projected” surplus we heard so much about in the late ’90s). At that point, adjustments to the growth-rate of the money supply could be made simply by adjusting the percentage of the surplus that is rebated to taxpayers. In other words, the rebate would go down

  2. 2

    Thus, if Person A captures enough of Person B’s loan principal to repay his loan plus interest, the money supply is reduced to $90. Of the $110 it receives from Person A, the only portion the bank can spend back into the economy is the $10 it receives as interest. Doing so increases the money supply to $100, leaving Person B with $10 of unpayable interest debt. At that point, the only way Person B can avoid bankruptcy is for someone else to obtain an interest-bearing loan from a bank, making it possible for Person B to capture the necessary portion of that someone else’s loan principal to get out of debt.

    So we see that, under our debt-based money system, interest can never truly be paid off, but can only be shifted from one person to another, or one sector of the economy to another (public to private, or vice versa). That more than anything else is what creates our dog-eat-dog, musical chairs economy — an economy in which millions of people work frantically to capture other people’s loan principal; and in which virtually everyone works (to one extent or another, and whether they realize it or not) as indentured servants to the banking elite.

    The only way to fix this problem is to replace our debt-based money system with a debt-free money system. Under a debt-free money system, all new money would be spent into circulation interest-free instead of loaned into circulation at interest. This is just common sense. If the government can issue a dollar bond, it can issue a dolla

  3. 3

    Huge government is great because as long as it is run properly it protects the people it represents from private business that will murder them for their money if they can get away with it.


    All money is created out of nothing by a private banking cartel and then loaned into circulation at interest — first by the Federal Reserve, via its purchase of government bonds; and second by commercial banks, via fractional reserve lending.

    There are two critical problems with this process.

    First, when the banking cartel loans money, only the principal gets created, not the interest. This is why the overall indebtedness of the economy is always several times greater than even the most liberal estimate of the money supply. Granted, if no one borrowed, there would be no interest to pay; but there would also be no money supply, and thus no economy.

    Second, because all money is created as a loan, whenever the principal of a loan is paid back, the money supply is reduced by that amount.

    Say, for instance, the money supply is currently zero. If a bank loans Person A and Person B $100 each and charges them 10% interest, the money supply increases to $200, yet total indebtedness increases to $220. As a result, the only way either one can pay the interest he owes is to capture a portion of the other person’s loan principal through the process of commerce.

    Thus, if Person A captures enough of Person B’s loan principal to repay his loan plus interest,

  4. 4

    Artificial Scarcity
    Artificial Scarcity occurs when the supply of X is controlled to make it scarce on purpose when the reality is that the supply of X is virtually unlimited. This is usually done to make X worth more than it really is, and thus increase profits for those who are the purveyors of X.

    The easiest example of this is food. Every year millions of tons of food end up in landfills because the stores that bought it were not able to sell it. They rather throw it away to keep food scarce/expensive than give the food to those who need it for free. By doing so they create an artificial scarcity of food.

    The largest example of artificial scarcity is the supply of money. Money is nothing more than metal/paper with fancy pictures on it, and has no intrinsic value accept what we give it. If we are experiencing financial problems we should either print more, or throw the entire concept of money in the garbage.

    How morally bereft do you have to be to openly advocate the needless suffering/deaths of millions of people over the artificial scarcity of metal/paper with fancy pictures on it?

    You cannot rely on private business to take care of society.

    Private business is not for the people by the people. Private business is for the money by the company. Private business will take your money, and give you nothing in return whenever they can get away with it. See private health care for examples.

    Huge government is great because as long as it is run properly it protects the p

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