Thursday, August 27, 2009

100,000 Michigan Citizens to Lose Unemployment Benefits

Something ain't right.

Ya gotta admit, things seem to be in pretty good shape considering the state's unemployment levels in many cities are reaching Depression Era levels, approaching 20% in some areas.

That is partially because of the massive unemployment benefit extensions to the state of Michigan and around the country. As posted in my blog at the DailyKos the state of Michigan is likely to be in for a severe jolt in the next 6 months as all the Federal unemployment benefit extensions come to an end almost all at once.

-- Article

The math is this:

100,000 citizens losing their unemployment benefits x $1200 month per citizen

$120,000,000 sucked from the Michigan economy each month, removed very suddenly as the Federal unemployment extensions end.


And the economy is in no place to absorb these individuals who have lost, entirely, all income.

The Michigan economic situations has been buffered tremendously by the Federal unemployment extensions.

Now the Michigan legislature is calling for another extension to unemployment benefits. And that sounds to me like a fine idea...

But...unemployment benefits are an excellent tool to hold people over for a short term until they can find a job. Or in more robust economies, they're great tools for holding over a region until the economy rebounds and can absorb those losses. And let's face it, Michigan isn't in that position. When we extend unemployment benefits now, they will need to be renewed again in a few more months. And again. Something else needs to be done.

Michigan's economic climate and the ongoing needs of its citizens are far beyond what can be helped by mere unemployment extensions.

In addition to giving people the money they need to survive, the State or Fed needs to give those who are willing and able the means to create self-sustaining businesses to employ themselves and others. The banks we've bailed out to the tune of trillions have not been forthcoming with small loans or lines of credit to start up businesses, at a time when investment in small business would make the greatest difference.

The State or Fed needs to directly offer very small business loans to start up entrerpeneurs who have no other financing options. We're already giving money to the unemployed with no hope of return...we do it to help the unemployed keep their homes, maintain some dignity, and offer them a modest standard of living. Why not also lend to individuals who have a business plan some Federal or State money that COULD potentially provide a return on invesmtent?