44,000 Iowans Declared Financial Casualties In GOP War With Obama Administration

We’ll it appears that the Grumpy Old Party has a soft spot for the mega-wealthy but not for the average hard working and out of a job through no fault of their own Americans. Big surprise there. Never mind that everything points to the loss of jobs as the number one problem the economy faces and is going to further guarantee the loss of profitability in the private sector. Which of course, in light of recent record profits on Wall Street, will not effect the bottom line at all as I’m sure they’ll just be terminating all the people hired temporarily during the holiday season to serve those that still remain employed.

I spoke with Research Associate Noga O’Connor, who reviews employment trends for the nonpartisan Iowa Policy Project and she explained: “By not extending unemployment insurance — historically unprecedented with national unemployment rates near double digits — Congress immediately cut off or reduced benefits for about 44,000 Iowans. That will hurt the Iowa recovery, as unemployment benefits are spent immediately in the economy.”

“Though there have been some good signs in the Iowa economy, Iowa still has a high jobless rate of 6.7 percent and is about 50,000 jobs down since before the recession. Recovery will be slow, and we do not expect people who are losing unemployment benefits today to be able to quickly find jobs as we head into the holidays and winter.”

When I spoke to Ms. O’Connor she said; “based upon 2009 numbers, which were slightly higher than they are today, somewhere around 30 million less dollars per month would be coming into the Iowa economy because of the failure to extend benefits.” She later confirmed via email that for the month of October 2010 $31.4 Million in benefits were paid to Iowans.  Ms. O’Connor also pointed out that most of the money that people receive in unemployment benefits goes directly back into the economy rather than into savings and would therefore have an immediate and direct negative impact upon the Iowa economy.

What might this mean for an Iowa municipality? In the case of Bettendorf, IA which represents slightly more than 1 percent of Iowa’s population and would see a reduction of somewhere between $220,000 and $330,000 per month into the economy. For Davenport, IA this number could be as high as $1 million per month. This may seem like a small number to some people but to those that will no longer be receiving these minimal benefits it perhaps means losing health insurance, a place to live for them and their children and it certainly makes for a very bleak holiday season to look forward to. With unemployment still at historically high levels this recent congressional inaction seems to many like a particularly cold shoulder indeed from republicans who have repeatedly said they have one thing and one thing only on their agenda; Stop President Obama.

It appears that 2 million Americans were just caught in the GOP crossfire and will begin losing benefits immediately. What does this mean for the nations economy? In 2009 this nationally amounted to approx. $360 million per month. While this number is slightly lower this year, these benefits remain the only thing preventing homelessness and hunger for 44,000 Iowans and their dependents. It’s hard to get a handle on how many people this truly effects but it could be extremely serious for families and Iowa’s economy as well.

While deficit hawks through simple inaction have imposed austerity measures upon only the hardest hit Americans, they have failed to grasp that unemployment benefits actually saved 1.8 million jobs at the peak of the “great recession” according to a recent report by the U.S. Dept. of Labor. The report also found; “In total, unemployment insurance kept GDP $315 billion higher from the start of the recession through the second quarter of 2010.” In other words; by allowing unemployment benefits to end for so many Americans, republicans have guaranteed a slower economic recovery for all Americans and possibly endangered even more Americans jobs.

~David
VanThournout lives on the Mississippi river in Rock Island. He plays
guitar, writes poetry and music, designs websites, and organizes for a
more just and peaceful world. More than a decade ago David began
demanding meaningful employment rather than mindless work making
widgets. David now requires that he loves what he does and that it
actually makes the world a better place in a way that is sustainable.  Follow David on twitter at twitter.com/badweatherrr. E-mail David Van Thournout.