By the end of 2009, the unemployment benefits of over 1.5 million Americans will run out.
Take a look at the linked map. Is this not one of the most frightening things you’ve ever seen? Notice how the map highlights areas that are the most densely populated urban centers of the country (i.e. where the vast majority of the country lives). These areas already have over 10% unemployed among their residents (and as we know, freelancers are not counted in this tally, so areas like NYC and Los Angeles are probably twice as bad as they look!). Clearly the long-term outlook for finding a job is becoming worse and worse. One in ten people going into the desperation zone at the same time might have a slightly detrimental effect on the other 90% of the population. What do you think?
And anyone cherishing Pollyannaish thoughts that things will turn around again anytime soon (“They always do!”) is simply not looking at the bigger picture. Or stupid.
This is the way things are now.
Absent another debt orgy, an economy with a GDP that is 70% based on consumer spending is fucked. There has been much touting from the Obama administration of how the stimulus spending stopped the free fall and saved the economy. I think it slowed the pace of the free fall, but saved the economy? Puh-leeze! There is no saving this economy. If by “saving” they mean “reflating” the same asset bubble that allowed an increasingly impoverished and indebted population to live like kings for a few years on credit cards and home equity loans, I think it’s safe to assume they can forget about THAT.
States like California, Ohio, Florida, New York and Michigan are fucked unless the government extends unemployment benefits again. And again. And again and again, because the old way of life is not coming back.