Today, unemployment broke the double digit barrier and climbed to 10.2%, despite Keynesian forecasts that we would be out of the woods by now. Real unemployment (reporting the data the way it used to be calculated) puts this figure at 17.5%. All is not well, contrary to cheers heard on the street.
In order to compensate for this disaster and save face, Obama and Congress helped feed the welfare state even more by extending benefits. The bill will lengthen the time that one is eligible for jobless benefits and continues the housing tax credit. Why Congress is encouraging another housing bubble after one just dealt a devastating blow to our economy is beyond me. Sky high unemployment also has many thinking that interest rates will remain extremely low for the foreseeable future because raising them now would “stunt” any recovery. With a horrible track record, people need to reconsider whether the Fed should have any say on interest rates — or for that matter, exist, at all.
Everyone became giddy with last quarter’s GDP “growth.” These new unemployment figures have sobered all of this cheerleading. So, next time I hear that a “jobless recovery” is quickly upon us, I’ll be asking, “Are you sure about that?”Published in