While there are a number of governmental tricks that can be employed to delay many of the cuts in spending and rises in taxes if we go over the cliff, there is one critical group who will feel immense deprivation immediately – with no recourse to fiscal or parliamentary tricks. Many of these people were only informed through their State UI centers in the past week or two that 12/31/2012 is their absolute cut-off date (no matter how much money is still in their “tier” to be disbursed).
As one would expect, they are the most vulnerable group in the country – the over 2 million people who are currently collecting federal Unemployment Insurance. All EUI will be cut off completely at the stroke of midnight on Monday, December 31, 2012. This will leave the 2+ million who rely on UI as their sole source of survival. Remember, these are not the GOP’s “lazy takers,” but people who have worked, consumed, and contributed taxes their entire lives, who are currently out of work through no fault of their own, primarily as a result of the economic crash of 2008 that the GOP brought about themselves.
People on UI are the single group most likely to put every penny they receive back into the economy as fast as they can. the loss of the estimated $3.5+ BILLION a month in consumer spending ($40 billion over the year) will crush any chance we have of sustaining our weak recovery. Without consumer spending (demand) there is no incentive for businesses that are already producing more goods and services than consumers can afford to make new jobs. In fact, companies will be forced to lay off more people (or send even more jobs abroad), creating a positive feed-back loop of shrinking demand, shrinking production, and a contracting economy, until we are either in a full-blown Depression, or our economy totally craters and the country can no longer function as a country.
To make this even worse, during the first quarter of 2013, an estimated additional 1 million long-term unemployed will exhaust their initial benefits and find that all three tiers of federal EUI no longer exist. They, too, will be penniless, cutting an additional $15 billion or more out of the marketplace.
These people won’t even be able to afford an internet connection to hunt for jobs and send out resumes, or the gas to drive to interviews and back (let alone pay rent or mortgage, feed and clothe their children, and handle all other obligations while they continue desperately to search for work).
Blocking a last-minute deal that includes continuation of Unemployment Insurance, our politicians will have committed one of the most obscenely inhuman acts on their own citizens in my memory (and I have a very, very long memory). Representative Boehner, Senator McConnell, the GOP “young guns,” like Paul Ryan and Eric Cantor, and the entire Tea Party wing of the Republican party will still be reviled in history texts a century from now.
This tragedy will happen 55 hours and 20 minutes from the time I am posting this.
There is still that period to act. Will anybody in the GOP show the minimum human compassion to make this not happen?