Most people who visit this site have seen the chart from Innocent Bystanders which shows the actual unemployment number versus the projected unemployment (see below) when the stimulus bill was being debated.  However, the percentage is just part of the story.  The truth is that overall jobs available are decreasing (see below: also from Innocent Bystanders) and this has gone on for twenty-one months.  This is a sobering thought on its own.  This article from FoxBusiness.com gives a bunch of stats relating to unemployment that may be news if you have not delved deep into the numbers.

The truth is the numbers are much worse (17%) when the discouraged and part-time workers are included.  This means that when the economy takes off, the unemployment number will not be coming down any time soon since the jobs will bring the discouraged workers back.

With this in mind, it is clear we are in bad shape and despite what VP Biden, says, the stimulus is not working.  So now Major Garrett reports that the Administration is looking at measures they can take to help (don’t call it Stimulus II).  The problem is, and this is a big one, the proposed changes do hardly anything to create jobs.  For the most part, the proposals are designed to make unemployment more comfortable which may be compassionate but is does nothing for the problem.  The job creator that I see in the report is an extension of the first time home buyer credit.  It may help some.  I see the home credit as a smaller cash for clunkers which has created artificial demand for homes that otherwise would not have existed so it likely will help some.

What we need are JOBS.  I am not optimistic with the current leadership but our best bet now to get out of the recession is for someone to  step up and admit that the targeted stimulus and “shovel ready” projects are not creating work and they need to take a free market approach.

Here are some things I would like to see although I do not expect they will be likely considering who is in charge at the moment.

  • A stop on any legislation that if passed would harm business and restrict hiring.  If this one happens, it will be because the legislation was defeated. This would help move the business mindset away from risk management and damage minimization.  The fear of what might be forced on the market is encouraging playing it safe.
  • Tax incentives to encourage hiring.  This one is pretty obvious.
  • Tax incentives to encourage businesses to spend the cash they are accumulating.   They are sitting on huge cash reserves and they will not spend it if they don’t see a benefit.
  • A tax holiday for individuals to increase take home.  Let;s face it … if we have more in our pockets, most of us spend it and consumer spending is needed if we are to come out of the recession.
  • Incentives to encourage investing.  Those who have money are sitting on it or going for “safe” investments like gold.  That is no good for the markets.

We need to get people out of the fear mode and optimistic about the future.   To do that, we need things that are going to move the people with the money, whether that is individuals or businesses.  Increasing unemployment benefits and reducing the cost of insurance while you are out of work will not accomplish that.

- FOP Vermillion