January saw the largest one-month job loss since late 1974. Businesses eliminated 598,000 jobs. In the last 12 months, the nation has lost 3.5 million jobs, the largest 12 month job loss since records started in 1939.
While the employment rate is still at a manageable 7.6%, the numbers of unemployed workers are rising and the figures do not account for how many Americans have taken pay cuts, benefit cuts or cuts in their weekly hours. Nor can the numbers assess the state of the large number of freelancers and contract workers who do not qualify for unemployment but who have lost sources of income.
While the stimulus package is designed to jolt the economy out of its malaise, I donâ€™t think anything will be able to pull us out of this recession quickly. The problems are too large and too wide reaching. No matter how much money the government pumps in, it will take awhile for that money to work itself through the economy and reach all the people currently suffering.
Nevertheless, we must resist the urge to overreact. The massive borrowing necessary for the stimulus package (and TARP and the ongoing wars) will cause problems in the long run. How much of our future GDP will have to go towards paying off debt? How much of our future prosperity are we willing to risk in our efforts to jump start the economy now? Certainly something must be done. But that doesnâ€™t mean everything will work.
I still hold out hope that Congress can whip the stimulus package into a lean, mean bill devoid of excess and appropriately targeted. Hey, in these times, you have to have hope in something, right?