It's pretty common to hear or read Politicians and Pundits in the news on both the left and right side of issues debating the positives and negatives of welfare and accusing or defending the current unemployment rate. No one ever reaches a solution, it is becoming an everlasting argument.
Without knowing the facts, the argument becomes either a buzz in ones ear, or it becomes a tainted weapon picked up in a battle that is dishonest, dishonorable, and unjust.
A brief review:
In January of 1981, at the start of Ronald Reagan's first term in office, the unemployment rate was 7.5%.
By November of 1982, the rate had risen to 10.8, it remained in the 10% level for 10 months, until June of 1983. In May of 1984 the rate had climbed back to 7.4%. It took 16 months to recover to the same unemployment rate, relatively the same point of recovery we are at in our current situation today.
This 10.8% rate was the highest point in U.S. unemployment rates since 1948, which is as far back as the online stats track. It is 0.8% worse than the 10% unemployment rate high in October of 2009.
In 1989, the rate had decreased to 5.0%. This was just a few months after George H.W. Bush took office.
In 1992, the rate climbed back to 7.8%.
The rate was 7.3% when William Clinton took office in 1993. It hit a low of 4.0 in December of 1999.
This is the second lowest dip in the unemployment since 1953, where it hit a 2.6% unemployment rate under Dwight Eisenhower (R) during the Korean War. A little context for the situation, this was in a "Post-New Deal" economy during wartime. The success of the New Deal programs were fresh in the minds of the people and the Politicians both Left and Right, and the wartime economy was a positive to the unemployment rate also, as it has consistently been throughout our Nation's history.
The jobless rate waxed and waned under both Left and Right leaning administrations for the next fifty years. Some pundits seek to castigate and accuse the parties in power at the time, while others seek to point to justifications that present arguments that increases in the jobless rate are an effect of the previous Administrations bungling. There is some proof of both of these standpoints, for both parties involved, in certain times. This is a sidebar argument that doesn't belong here, and can be argued more effectively as its own topic of discussion. Put short: I don't care, I'm not here to blame.
In January of 2001, George W. Bush inherited a 4.2% unemployment rate. By January if 2009, when G.W. Bush left office the unemployment rate was 7.8%. It had ticked up from a 4.8% unemployment rate.
In 2009, the unemployment rate hit 10%, and that recent high in 2009 lasted only one month. In contrast to that recover curve in the 80's, it has taken 42 months to recover to a mid-7% unemployment rate.
When the jobless rate goes up, the number of welfare recipients goes increases also.
There are two well-established opinions as to the effectiveness of the current recovery.
One is that the Current Administration, ultimately led by Obama, has fumbled the recovery and that is why it has taken the 42 months to recover.
Another is that the TARP, Wall Street, and Auto Manufacturer bailouts rescued the country from a much worse potential unemployment rate, one that could be projected past the 10.8% level suffered in Reagan's first term.
It is all academic and some of it is estimates and conjecture, and it is used as a fireball to throw at the other side's defenses. This is all political theater.
The problem with the Conservative argument about the recovery is that there have to be jobs available to move people out of unemployment and welfare in order to move people out of unemployment and welfare. Without investment capital, the unemployed cannot create their own jobs, and if business isn't shopping for new employees those people are stuck, unless other choices become apparent. There is no free market solution to force companies to hire.
In a static situation unemployed persons' choices are:
1.) Continue to collect public assistance.
2.) Commit Crimes to take what they need to survive.
3.) Get thrown out on the street, suffer and die.
None of these choices are good for people in that situation, nor is the status quo encouraged by the low cost/low skill/low pay labor market in our country.
It is more profitable to remain on welfare than to work a minimum wage job in 40 of the 50 states.
The problem with the Liberal argument of the recovery is that there is only "carrot" and no "stick" involved in social welfare programs. Often there are limits, or expiration dates for a person drawing social benefits, but there are severe lacks in effective audit or justice mechanisms that prohibit fraud or abuse of the system, and if public servants get involved in corruption at some levels of the process it becomes even worse.
Also, while the programs subsist on the tolerance of a state-provided budget, the people providing that state-provided budget (taxpayers) do not see any efficient product or reward for greater portions of the money invested (or taken).
It costs $139 Billion annually to support the 5% of our population that utilizes welfare (this doesn't factor in unemployment). This is a cost taxpayers pay, or future taxpayers will pay (assuming we ever get deficits in order).
We as a nation believe that there should be no free lunch, but we also believe in helping others. These concepts war with each other.
There is a solution to the problem, and it's not unlike the solutions enacted to combat the staggering problems our country faced during during the Great Depression. Solutions like the New Deal.
The US government, or state and local governments (though it is unclear how funds disbursal through multiple levels of bureaucracy would be more efficient) could invest in development platforms across our country. We as a nation have large amount of natural resources available that could be developed and/or harnessed in ways that are safe, could provide profit to companies contracted to extract or deliver them, could be effectively regulated by government controllers, and could provide jobs to the public.
Those platforms, if leased (not sold) to private business and taxed effectively, could provide return on investment back to government coffers, those platforms could be utilized as a means to both provide an available job and a better wage to those needing work and also as a means of leverage to remove that stagnant or cyclical reliance of the unemployed or underemployed on public benefits. This could provide them a better standard of living than welfare can provide, self esteem and self worth, a marketable skill-set, and their spending power in the economy would increase, strengthening the US economy.
The critics of plans like these tout the enormous cost of programs like this as justification to not enact such a plan. But is a set cost with a slow return better than a slow bleed with no end in sight? Yes, it is. It is the difference between investment returns and loan interests. It is the difference between having money put back in your pocket, or having it continually leeched from it forever.
People needing jobs is never going to stop until their are either no people (extinction), or all people stop working as a motivation to subsist (the end of the Capitalist Economic Model).
One other alternative, the status quo, provides no "out" for our current problems. The same thing that has been happening keeps happening until forever, or until such a radical change occurs that the assumed normal rules of our current world no longer apply.
The other alternative, starvation of the people, also doesn't provide a satisfactory solution. There are several examples in world history that show "the haves" suffer greatly at the hands of the "have nots" when great economic and social upheaval occurs. In this alternative, a large portion suffer greatly, and eventually small portions are victims of circumstances, some at random, in situations that could have been prevented. To protect what you have isn't it prudent to provide methods of insurance to prevent desperate someones from trying to take it from you?
The Left will tout some type of idea that I propose selling public land to private interests: I state clearly; lease, regulate, and tax, not sell. Some will claim I want to disfigure the environment: once again, I state; regulate.
The Right will claim I propose overtaxing private holdings: don't get into business if you can't figure out how to profit. Some will say my plans require taxes to implement them, and all taxes are inherently bad. If taxes provide increased opportunity for persons at all levels (work, investment, ownership) they cannot be viewed with such a negative lens. At worst, in such a model they are inconvenient or annoying.
The Liberty front, which in its purest form cannot be viewed as Left or Right, will argue against taxation also, but from the angle that taxes are oppressive to their Liberty and freedom.
My counter argument is that taxes aren't oppressive to your Liberty or Freedom, but they are in some situations inconveniences for how the owner seeks to exercise that Liberty or Freedom. People aren't forced to silence or prohibited from travel because taxes, but sometimes cannot afford a megaphone or an airline ticket because of taxes. They limit or inconvenience a persons decisions, they don't force inaction. One is still free to rearrange assets to provide means to their ends, and one is still free to spend themselves into debt. The second and most purest Libertarian alternative to my proposal is a personal and cultural retreat to one's own corners. Where one is unlimited in exercising one's Liberty they must constantly defend against those doing the same. This defense also limits a persons decisions, because they can only exercise their Liberty in areas they control or have power to do so. It becomes Barbarism, and in the best possible estimations is no better than taxation in the burden it puts upon the individual.
The Anarchists will simply say, "I like cheese." or some other mumbo jumbo. My plan will provide the public framework for them to obtain the private council they need.
I see no better alternative.
