August 03, 2010

No Safety Net

After the American Century

The American unemployment system does not work well if a recession lasts much more than one year. To be precise, benefits run out after 99 weeks. The first people laid off in 2008 have now reached that point, and they are losing their homes, their cars, and everything familiar in their lives. The Congress is not doing anything for them. In fact, it had trouble getting itself to extend benefits to 99 weeks.

Contrast the New Deal in 1933. President Roosevelt created work programs for the long-term unemployed. They did not pay well, but they gave people enough to live on, a sense of purpose and hope for the future. These programs also helped reforest and replant areas that had been misused, built parks and recreation areas, improved roads, and much else. The money was by no means wasted, and the human capital was not lost either.

Indeed, some important writers were given jobs preparing comprehensive guidebooks to every state in the union, and others worked as actors and directors for an arts program that was supported by the government. Today the United States seems far less able to find creative ways to deal with the crisis.

Unless the economy improves soon, the US Congress might want to learn from the successes of the New Deal.