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September’s employment numbers, which were released last Friday by the US Department of Labor, have aroused a great deal of concern among the general public. With the unemployment rate skyrocketing to 9.8 percent– a 26 year high– people have a right to be worried. On Sunday, former Federal Reserve Chairman Alan Greenspan added fuel to the fire when he appeared on ABC’s “This Week” with George Stephanopoulos. In the interview, Greenspan called the new unemployment figures “pretty awful” and predicted that the jobless rate will continue to rise and will remain above 10 percent for a prolonged period.
My own suspicion is that we’re going to penetrate the 10 percent barrier and stay there for a while before we start down.
According to the Associated Press, Greenspan went on to offer President Obama some important advice.
The former Fed chief said he would recommend that President Barack Obama focus on trying to get the economy going but without doing so much that the government’s action are counterproductive. With growth for the third quarter appearing to reach or surpass 3 percent, Greenspan said he would not propose a second stimulus package.
Regarding a second stimulus, Greenspan said:
In my judgment it’s far better to wait and see how this momentum that has already begun to develop in the economy carries forward.
If Mr. Greenspan’s predictions are correct, more Americans can expect to hit the unemployment line. This frightening revelation becomes all the more worrisome when one considers the effects that Greenspan believes prolonged unemployment will have on future job opportunities. On Sunday’s program, he argued that the longer an individual remains jobless, the more difficult it becomes for them to reenter the work force.
People who are out of work for very protracted periods of time lose their skills eventually… What makes an economy great is a combination of the capital assets of the economy and the people who run it. And if you erode the human skills that are involved there, there is a real and, in one sense, an irretrievable loss.
All of this comes a mere is 8 months after Congress jammed through a so called “stimulus” bill without taking time to read it. The public was told that there was no time for debate and that even a few more hours of consideration could be catastrophic. President Obama and Vice President Biden assured us that if the stimulus passed unemployment would remain around 8 percent. With unemployment at 9.8 percent, all we can do is hope that our lawmakers have learned their lesson and take the time to read the health care bill before they vote (although, it seems doubtful, as Congress recently voted down an amendment asking for 72 hours to read the health care bill before it comes to a vote).