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Linder Statement: Hearing on Long-Term Unemployment

June 10, 2010

Today’s hearing is on “responding to long-term unemployment.”  The real topic should be “why have current policies caused long-term unemployment.”

Americans were promised the 2009 stimulus plan would create 3.7 million jobs.  Instead it was followed by another 2.7 million private sector job losses.  Vice President Biden recently admitted that at best we would fall 6 million jobs short of what Democrats’ forecast, just through the end of this year.

Even as job losses abated, 96% of the jobs “created” last month were temporary Census positions.  One Democrat witness said those data “do not present a picture of a healthy private sector.”

Democrats also predicted unemployment wouldn’t exceed 8% and would be about 7.4% and falling today; instead it remains stuck near 10%:

As part of that record unemployment Americans are suffering, record numbers are dealing with long-term unemployment.  Since the stimulus plan, the number unemployed over six months has more than doubled to a record high of 6.8 million:

Number Unemployed for 27 Weeks & over (Seasonally Adjusted)


But instead of questioning whether this disastrous outcome might suggest a wrong approach, our colleagues are pressing for more of the same – more stimulus spending, more debt, and ultimately more taxes.  That’s what the House passed before Memorial Day, and is currently before the Senate.

The American people are not on board.  A Gallup poll released Friday shows 79% now view the federal debt as a serious threat to the “future well being” of the country – the same share who view terrorism as a serious threat.

And even the Washington Post is now questioning if this makes any sense:

“Maybe a case can be made for another round of unemployment benefits and other spending that reaches the economy quickly.  But as analysts ponder the mystery of weak private-sector hiring despite signs of economic growth, it’s worth asking what role is played by government-induced uncertainty…. That’s especially true when they look at looming American indebtedness.”

Millions of Americans are already paying for that “government-induced uncertainty” – through the unemployment they are experiencing because businesses are not hiring.  Just last week the Treasury Department reported our debt will reach 93 percent of GDP this year.  Experts believe debt loads above 90% reduce economic growth by 1% — resulting in 1 million lost jobs, according to the Administration’s own models. 

And even when businesses are willing to hire, nearly two years of unemployment benefits are too much of an allure for some.  Here’s what the Detroit News recently reported:

“In a state with the nation’s highest jobless rate, landscaping companies are finding some job applicants are rejecting work offers so they can continue collecting unemployment benefits….  Chris Pompeo, vice president of operations for Landscape America in Warren, said he has had about a dozen offers declined. One applicant, who had eight weeks to go until his state unemployment benefits ran out, asked for a deferred start date.”  (Detroit News, “Landscapers Find Workers Choosing Jobless Pay,” May 10, 2010)

The evidence is mounting that so-called stimulus policies rammed through Congress are doing more harm than good.  If we want to solve the problems caused by those policies, including long-term unemployment, we need to stop doing what is not working.  Repeal the stimulus, stop the spending, force government to live within its means, and really help Americans get back to work. 

It’s as simple as that.