Republican Cuts To Unemployment Payments Didn't Result In Job Gains

The job gains from Republican governors' decisions to cut unemployment benefits didn't result in the massive spike in job applicants as they had promised. Instead, it results in major spending cuts that are now hurting state economies. This is EXACTLY what economists had predicted would happen because the Republicans' decisions weren't based on economics - they were based on the false belief that Americans are inherently lazy. Ring of Fire's Farron Cousins explains what happened.

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*This transcript was generated by a third-party transcription software company, so please excuse any typos.

Several months ago, well, actually over the span of the last several months, 26 different states across the country ended the extended unemployment benefits that were offered by the federal government during the pandemic, of those 26 states, 25 of them were run by Republican governors. And now that we have a little bit of time that's passed between then, we can see the difference it made because let's not forget. They said they're cutting these benefits because people are getting paid too much to not work. So if we cut the benefits, people are going to go back to work. So what's happened? Only about one in eight people who were on federal assistance were able to find them employment. One out of eight, which means seven out of eight are now no longer receiving the extra unemployment benefits, but they still aren't able to get a job.

So it turns out that sure, there was a tiny, tiny little uptick in the amount of people working, but not enough to make a measurable difference. And in fact, the economies in these 26 states actually faired more poorly than those who didn't cut the extra benefits. And here's why, and by the way, the why of this was totally predictable because all the economists out there predicted this. We had talked about it at the time when this idea was first proposed, and guess what? It resulted in a net $2 billion loss in the economies of those 26 states. And I'm not talking about $2 billion combined, $2 billion per state. So we're talking about $52 billion across the 26 states. Here it is.

Households had to cut their weekly spending by 20% as a result of these unemployment cuts. As a result, economies of the cutoff states saw a reduction of nearly $2 billion in consumer spending from June through the first week of August, a 20% spending cut amounts to a big reduction in quality of life for these households, households, which are largely lower income. So you cut the benefits. You promised us it was going to get people back to work. That didn't happen. So now you just have more people with less money and your state economies are losing billions of dollars, billions of dollars, by the way, every couple of weeks. The pandemic is far from over. I mean, what we're seeing right now is actually worse than ever at this point.

We're not out of the woods, hell, we've barely even entered the woods based on the numbers we're seeing right now. We have a long way to go. We're not going to be back to normal by Christmas. We're not going to be back to normal by Spring Break next year. We have so much more to do and we're not going to be able to get over this pandemic unless we can pay people to stay home. And I know that sounds like a foreign concept folks, but a lot of other countries were able to do this and they got their numbers under control a hell of a lot faster than the United States has because we've really never got our numbers under control. But they paid people every month to stay home, to not go to work, to work from home. They took care of their people who lost their jobs.

We're not doing that because we've got this idiotic patchwork framework of 50 different states doing 50 different things. They may take the money. They may not take the money. They don't know. They make it up as they go. This pandemic is kind of showing us almost at this point that hell maybe America is too big to govern.

[MichaelSmith-fjdi]

This is just a reminder that every modern GOP president in history has somehow caused a recession or made an inevitable one worse.

[kbusby]

These are the same people who have been peddling trickle down for forty years.

[youtou]

A $300/month cut resulted in a $2B loss in state revenue. Imagine what increasing the minimum wage from $7.50 to $25 would do for these states.

[markfeland]

Let's face reality, cutting benefits was all about forcing people back to work for starvation wages. If you want folks to work for you, pay a decent wage or go of business, that's how capitalism is supposed to work

[Aikidragon_Prime]

Hey Farron, why don't you run for Fl. Governor. You'd make a good one, a billion times better than ANY republican goon. If I lived in Fl. I'd vote for you.

[obamanyoutubetookmychannel]

GQP are not true Christians, what happen to helping those who need help

[donnieanderson]

How can you go back to work when your governor put you six feet under

[johnetter]

I remember applying for many jobs before taking an early retirement because many employers considered me to be overqualified. My skills include social services, graphic design, and basic office skills. And since being retired, I can basically tell the employers to go to Hell.

[bizzarowitz]

I struggled heavily while I waited for them to verify when I didn't have an up to date ID when the Texas DPS office was closed last year. I have a friend who is in his 60s now living out of his truck because this program was ended early. This is frankly unacceptable.

[poskeegget]

Republican economics being bad? Surely not. One would think that people that doesn't even grasp what is and isn't real would be able to make sound political desicions. (Heavy sarcasm)

[craigjonesISno.]

To anyone who is reading this who votes Republican, can you please tell me

[cristobalrodriguez]

The GOP needs that money for their downers. More money for the RICH

[speks]

Why work for a system that doesn't care whether you get horribly sick or not? It's not about laziness It's about self preservation.

[corringhamdepot]

Basic Economics theory tells us that giving a little extra money to the poor, is going to have the biggest net effect on the economy, because they spend the extra. Unlike giving the same amount to the rich as tax cuts, because they they tend to save it. It's called the "multiplier effect". The number of times the same Dollar is spent before it gets stashed away in savings. One person's spending is another person's income. The multiplier effect is higher the lower you go down the income levels.

[albinb]

Imagine the medical bills that are going to be accumulated in these red states

[Fate]

...so ending benefits didn't bring people back to work? Oh deary me, who didn't forsee THAT?!

[hussrealz]

So this is what a societal collapse in slow-motion looks like

[nickmasuen]

Here in the state that I am in, Iowa, the state government had made it basically imposable for me to get anything help from the unemployment benefit. reason being is that I have a medical condition that only allows me to work part time, which I was doing, and that I get once a month a SSI payment in the $800 range. So they basically clam that because I was already getting some sort of help I am not able to get any more. Yet my rent is $565, and as far as getting back to work for who I was working for when COVID kicked in, I was not completely fired. but was told by the company that my job would be put on hold, and they would get back to me when it was posable for me to come back. and so far they have not done diddly shit in getting back to me nor have they fully answer any of my questions when trying to get ahold of them and ask which way thing are going as far as me getting back to work. 

So as far as Iowa's state government seems to see it, it is going on the idea that since I am getting some funds from SSI and that I might, not definitely but might, already have a job in waiting then why would they even need to bother with me.

That's how they run thing , BACKWARD.

[jokelethkurueisner]

Money makes the world go round. Cut off the income on one end, and you’ve cut off the related income elsewhere.