I saw the numbers flash across the screen the other day re: those filing for unemployment. We're cranking out benefits for first-time claims in excess of 550,000 per week right now! First-time claims for unemployment benefits in the week to December 13 was 554,000, the previous week's revised figure was 575,000 per the Labor Department.
Here's another stark statistic: The jobless rate has risen to 6.7 percent. This is the highest rate since October 1993.
I have no idea how much money is being shelled out to cover those benefits. I know the government keeps extending unemployment benefits. Businesses "fund" unemployment benefits through payroll taxes in part. It's administered through the state with the federal government funding the program when unemployment is high and the states can't cover the costs.
It was intended to be a short-term program to help cover basics while the unemployed individual looked for a new job.
Then we have the bailout. Our politicians are tinkering around with billions and billions of our current and future dollars to bail out select businesses.
According to the New York Times the Treasury has now spent the first $350 billion of the bailout (http://www.nytimes.com/2008/12/20/business/20tarp.html).
The states are in trouble and have their hands out. Insurance companies are trying to restructure to meet the bailout requirements. The government just changed the rules of the bailout and opted to throw money at the auto industry. Every time I tune into the news I hear of another business that is laying off people or another business group with their hands out.
I heard on the news that 7% of companies who were matching 401K employee contributions have stopped doing so. Businesses are cutting back. States are considering increasing taxes. Some governments and businesses are going to four-day work-weeks. Companies aren't giving out Christmas bonuses.
I could go on with the doom and gloom, but we're all aware of the state of the economy.
It's almost a vicious cycle, or maybe it's not "almost". I hear the bad news and I decide not to go buy the new car I wanted or to buy some Christmas gifts. I decide not to fly to see my family opting to save the money. You get the idea --- we're all hanging onto our money, just like the banks! The irony is that if we'd go shopping we'd help the economy and maybe stop that vicious cycle.
Sooner or later the government is going to have to shut off the money spigot. There's only so much of our money we can be expected to hand over to take care of companies that made bad decisions. My biggest fear is not that the economy will collapse and that we'll go through another depression, which would be horrible. No, my biggest fear is that Obama, Pelosi and friends will use it as an excuse to move us into a more socialistic society. I fear that more companies will let the government intrude inside their board rooms just to stay afloat. Given my druthers I'd choose bankruptcy and depression over socialism. One is temporary, the other is the ruination of the very foundation that has made America the greatest country in the history of this world.