The Stimulus Worked, Pushing Unemployment 2% Higher
We already reported last week how the current unemployment rates do not compare well to the unemployment rate of the Great Depression, because in the 30's they counted discouraged workers where today we do not (See http://bit.ly/c7SZnV).
"...if you count the people who have given up and those who can only find part time, the real unemployment rate is 17.2%. For a frame of reference, the unemployment rate ... in 1931, was 15%, versus our 17.3% unemployment today."More unemployment news coming from Alan Reynonlds, Senior Fellow at the Cato Institute. He commented on the stimulus acts damaging impact to the economy in a recent article in Investors Business Daily (http://bit.ly/aKsjQ7).
"Since federal spending accounted for exactly zero of the only significant increase GDP, how could such spending possibly have "created or saved" 2 million jobs? ...My own (Mr. Reynolds) estimate, in past articles available at cato.org, is that the stimulus act added about 2 percentage points to the unemployment rate.Not only does the Stimulus not reduce unemployment it actually increases it due to the extension of unemployment benefits from what it previously was at 26 weeks, "bringing the total up to 99 weeks in states with high unemployment." effectively quadrupling the length of unemployment that people can receive. Little wonder that we can expect high and persistent unemployment a la European style.