The job gains from Republican governors' decisions to cut unemployment benefits didn't result in the massive spike in job applicants as they had promised. Instead, it results in major spending cuts that are now hurting state economies. This is EXACTLY what economists had predicted would happen because the Republicans' decisions weren't based on economics - they were based on the false belief that Americans are inherently lazy. Ring of Fire's Farron Cousins explains what happened.
Link - https://www.cnbc.com/2021/08/23/ending-unemployment-benefits-had-little-impact-on-jobs-study-says.html
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*This transcript was generated by a third-party transcription software company, so please excuse any typos.
Several months ago, well, actually over the span of the last several months, 26 different states across the country ended the extended unemployment benefits that were offered by the federal government during the pandemic, of those 26 states, 25 of them were run by Republican governors. And now that we have a little bit of time that's passed between then, we can see the difference it made because let's not forget. They said they're cutting these benefits because people are getting paid too much to not work. So if we cut the benefits, people are going to go back to work. So what's happened? Only about one in eight people who were on federal assistance were able to find them employment. One out of eight, which means seven out of eight are now no longer receiving the extra unemployment benefits, but they still aren't able to get a job.
So it turns out that sure, there was a tiny, tiny little uptick in the amount of people working, but not enough to make a measurable difference. And in fact, the economies in these 26 states actually faired more poorly than those who didn't cut the extra benefits. And here's why, and by the way, the why of this was totally predictable because all the economists out there predicted this. We had talked about it at the time when this idea was first proposed, and guess what? It resulted in a net $2 billion loss in the economies of those 26 states. And I'm not talking about $2 billion combined, $2 billion per state. So we're talking about $52 billion across the 26 states. Here it is.
Households had to cut their weekly spending by 20% as a result of these unemployment cuts. As a result, economies of the cutoff states saw a reduction of nearly $2 billion in consumer spending from June through the first week of August, a 20% spending cut amounts to a big reduction in quality of life for these households, households, which are largely lower income. So you cut the benefits. You promised us it was going to get people back to work. That didn't happen. So now you just have more people with less money and your state economies are losing billions of dollars, billions of dollars, by the way, every couple of weeks. The pandemic is far from over. I mean, what we're seeing right now is actually worse than ever at this point.
We're not out of the woods, hell, we've barely even entered the woods based on the numbers we're seeing right now. We have a long way to go. We're not going to be back to normal by Christmas. We're not going to be back to normal by Spring Break next year. We have so much more to do and we're not going to be able to get over this pandemic unless we can pay people to stay home. And I know that sounds like a foreign concept folks, but a lot of other countries were able to do this and they got their numbers under control a hell of a lot faster than the United States has because we've really never got our numbers under control. But they paid people every month to stay home, to not go to work, to work from home. They took care of their people who lost their jobs.
We're not doing that because we've got this idiotic patchwork framework of 50 different states doing 50 different things. They may take the money. They may not take the money. They don't know. They make it up as they go. This pandemic is kind of showing us almost at this point that hell maybe America is too big to govern.
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