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What do Austerity and Cutbacks do to Unemployment Figures?

JMCC 2012/09/11 19:57:17
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Greece’s unemployment rate jumped to a record in June, approaching a quarter of the workforce as the country’s five-year recession deepened.

The jobless rate rose to 24.4 percent from 23.5 percent in May, according to an e-mailed statement from the Athens-based Hellenic Statistical Authority today. That’s the highest since the agency began publishing monthly data in 2004, and compares with a 23.5 percent median forecast from a Bloomberg survey of three economists.

“This is a grossly disappointing figure,” said Platon Monokroussos, chief economist at Eurobank Ergasias SA. (EUROB) “Unemployment is a lagging indicator of overall economic activity and thus the ratio may not have peaked yet.”

Greece’s recession has been exacerbated by austerity measures imposed to trim a budget deficit that was more than five times the euro-area limit in 2009. Prime Minister Antonis Samaras’s coalition government is hashing out an 11.5 billion- euro ($14.5 billion) package of budget cuts for 2013 and 2014 needed to keep rescue loans from the euro area and International Monetary Fund flowing.

A breakdown of the statistics showed the female unemployment rate rose to 28.1 percent from 26.8 percent, while the jobless rate for Greeks aged 15 to 24 rose to 55 percent, the highest in the 27-nation European Union, from 54.9 percent the previous month.

The highest regional rate was in Epirus and part of Macedonia in northern Greece, where the rate reached 26.3 percent, up from 24.9 percent in May, according to the statement.

To contact the reporter on this story: Marcus Bensasson in Athens at

Read More: http://www.bloomberg.com/news/2012-09-06/greek-une...

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  • Roger47 2012/09/11 20:05:00
    Unemployment goes up because...
    Roger47
    +6
    Cutbacks in government spending lead to layoffs of government employees. Cutbacks in aid to the unemployed and disabled leads to lower consumer spending by members of those groups. With all of those people spending less, retailers and manufacturers do not need as many employees, so they lay off emplloyees. Then those employees no longer spend as much. What you get is an economic death spiral.

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  • Odinsown 2012/09/13 03:52:06
    Unemployment goes up because...
    Odinsown
    +1
    Because the government is employing them any more. It isn't a nice thing but greece has completely mishandled the situation and hasn't actually done anything beneficial.
  • Pat 2012/09/13 03:43:29
    Unemployment goes up because...
    Pat
    +1
    Austerity and cutbacks cause unemployment to rise. We can see that in Europe today and we would see it here if Romney gets in and starts cutting everything.
  • sjalan 2012/09/12 03:58:51
    Unemployment goes up because...
    sjalan
    +1
    Fewer people are working means fewer people spending which means a viscous circle down the drain of deflation.
  • Dodgerfan 2012/09/12 03:18:09
    None of the above
    Dodgerfan
    +1
    It's either bite the bullet and strengthen the economy or get ready for a depression unlike none before. People who are nothing more than bureaucrats doing unnecessary jobs will have to go in order for the adjustments to be made. Along with that, companies should be allowed to fail to get the bad debts off the books so that those who can run them at a profit will be able to do so without government interference. Unemployment in the US is much greater than the figures government releases. They doctor it up to make the politicians look good while millions have stopped looking for work.
  • bob h. 2012/09/12 02:18:37
    Unemployment goes up because...
    bob h.
    +1
    People expect to get paid for work.
  • BlueRepublican 2012/09/12 00:45:05
    Unemployment goes up because...
    BlueRepublican
    +1
    People will be laid off and spending less money. The alternative of course is country going bankrupt or taxing the people to DEATH.
    It's not sexy but necessary. If you want balanced budgets, access to global credit, and financial solvency for govt services, then you live within your means.
  • Q 2012/09/11 23:31:01
    Unemployment goes up because...
    Q
    +1
    The economy contracts, at least from what I've read that's whats happened in most of Europe while the US has been able to have at least a little economic growth in no small part because of the stimulus packages which helped keep some local, state, city workers along with teachers, firefighters, and police men and women from being laid off.
  • connie (in name only) BN-0 2012/09/11 22:36:52
    Unemployment goes up because...
    connie (in name only) BN-0
    +3
    During previous recessions, public sector jobs increased. Due to budget cuts during the 2007 recession, government jobs have been lost. http://www.economist.com/node...
    http://mediamatters.org/resea...
    This causes more loss of jobs in the private sector also. There are fewer people spending "cash" (and paying taxes) to keep the economy moving. Common sense tells us that we are creating our own lack of a recovery, when we cut government budgets ."you don't cut government spending or raise taxes during a recession" http://www.economist.com/blog...
    Even Romney admits that we should not cut budgets during a poor economy. http://thinkprogress.org/econ...
  • EdVenture 2012/09/11 21:02:02
    Unemployment goes up because...
    EdVenture
    +2
    Greece is in a predicament similar to ours triggered by the financial collapse (risk debt value-derivatives and recession). A large part of their dependent economy relies on tourism and foreign investment. The resources fish, olives, wine are not enough to sustain it and demand is very low. Their infrastructure is inferior and skills are limited. Government Nationalized banks, schools, police etc are also at odds because there is no money to support them coupled with the debt thus lay-offs, thus no money in circulation etc. Borrowing in the form of bonds is costly given the risk of the loans it is constantly increasing and they the bonds mature to rapidly. 6 mos/1yr etc. They need a shared bailout or fail. Failure would certainly result in loosing their democracy and they will as a country be swallowed up by the banks which is ironic in that the caused the problem. It should also be noted that the banks providing the money are outsiders not their central bank which is nationalized. Just my opinion.
  • Mike 2012/09/11 20:16:59
    Unemployment goes up because...
    Mike
    +2
    corporations do not inject funds into the economy, the govt does, the only thing the govt does is fund jobs and small business, big corps should not get subsidies(corporate welfare) if a Corp cannot survive on its own then it must be broken up or allowed to fail. also tariffs on products coming into the U.S. should be used to keep competition fair.
    example you say: the recent solar panel problem. US was bidden out by China, not due to costs, but due to Govt intervention on china. right now the EU wants to sue china over its practice of subsidizing solar panel exports and thus for selling them for less than what it costs to make. why do 29 crops have more money than the US govt, because they do not put money into the economy. they horde it and call it good for business.
  • Schläue~© Mike 2012/09/11 20:38:24
    Schläue~©
    You do understand that the Federal govt. doesn't exist without private enterprise and investment,... correct?
    It never has, no matter how far back in time you choose to go.
  • Mike Schläue~© 2012/09/11 20:42:49
    Mike
    +2
    that same private enterprise is no longer supporting the govt, how you say?? they pay no taxes. thus corps do not help govt , but the small business man does because they pay the bulk of the taxes to the govt. and lack of jobs means less revenue and removing jobs from this country means less revenue. subsidizing job removal from this country means less revenue. wh y do you think the repubs shot down the
    The American Recovery and Reinvestment Act of 2009: Education Jobs and Reform

    it would have removed subsidies that sent jobs over seas why would the repubs vote AGAINST THAT?? they claim it would cost to much , but the only people it would have cost , were the corps that did it
  • Schläue~© Mike 2012/09/11 20:56:32 (edited)
    Schläue~©
    Don't even start with who has sent jobs overseas. GE and GM are two of the biggest culprits and as I recall,... GE didn't pay a dime in taxes.
    Who does 0bozo have on his panel of wizards, Czars & assorted crony union pigs?

    Are you somehow claiming that those employed by those nasty corp[orations aren't pumping their tax dollars into the kitty along with the other 50% of Americans?
    That their dollars do nothing to keep the Federal goobermint afloat and helping the economy?

    True, most of the revenue is generated by small businesses but it is asinine to discount those who work for the Home Depots, Wal-Marts and McDonald's.
    Their dollars are just as important.

    Perhaps the goobermint could lay off on price fixing and subsidizing farmers to plow under or dictate what crops they grow? Perhaps we could use the corn crops for food instead of tuning it into a product we don't need?

    Maybe you need a refresher course on how the borrowed taxpayer dollars were gambled with, how many $Billion% were sent overseas along with the associated jobs?

    http://obamanomicsoutsourced....

    Tracing Obama's Overseas Investments

    Electric Cars
    Obama handed over billions of dollars in loan guarantees and stimulus awards pursuant to his goal of putting one-million electric vehicles on the road by 2015. Much of that money e...








    Don't even start with who has sent jobs overseas. GE and GM are two of the biggest culprits and as I recall,... GE didn't pay a dime in taxes.
    Who does 0bozo have on his panel of wizards, Czars & assorted crony union pigs?

    Are you somehow claiming that those employed by those nasty corp[orations aren't pumping their tax dollars into the kitty along with the other 50% of Americans?
    That their dollars do nothing to keep the Federal goobermint afloat and helping the economy?

    True, most of the revenue is generated by small businesses but it is asinine to discount those who work for the Home Depots, Wal-Marts and McDonald's.
    Their dollars are just as important.

    Perhaps the goobermint could lay off on price fixing and subsidizing farmers to plow under or dictate what crops they grow? Perhaps we could use the corn crops for food instead of tuning it into a product we don't need?

    Maybe you need a refresher course on how the borrowed taxpayer dollars were gambled with, how many $Billion% were sent overseas along with the associated jobs?

    http://obamanomicsoutsourced....

    Tracing Obama's Overseas Investments

    Electric Cars
    Obama handed over billions of dollars in loan guarantees and stimulus awards pursuant to his goal of putting one-million electric vehicles on the road by 2015. Much of that money ended up leaving our shores. A $2.4 billion stimulus program to support battery production sent nearly half of its money to foreign firms, including two South Korean companies that used their awards to hire foreign nationals in Michigan to do work that Americans easily could have done. In the end, despite all the money Obama handed out, electric vehicle sales have lagged and The Washington Post deemed his goal of one million electric cars "overly optimistic."

    Wind Farms
    Obama's stimulus included over $8.5 billion in grants for wind farms that flowed overseas, despite Congressional criticism from both sides of the aisle. In total, over half of the money went to either foreign developers or foreign wind turbine manufacturers, creating thousands of jobs overseas with money that was supposed to create jobs within the United States. Even worse, hundreds of millions of dollars went to wind farms that began construction before the stimulus was passed. The end result of all this spending: the wind energy industry lost 10,000 jobs last year.

    Manufacturing TaxCredits
    As Obama was doling out over $2.3 billion in clean energy manufacturing tax credits that were supposed to create jobs in America, $880 million went to foreign firms. Worse still, some of those same recipients are now closing up shop and shipping jobs overseas.

    Loan Guarantees
    Remember Solyndra? The problems with Obama's loan guarantee program don't end there. The largest recipient of Obama's program to jumpstart green energy projects was the Spanish Company Abengoa, which took in $2.7 billion in loan guarantees for three of its projects. Other projects importing foreign-made solar panels are, much in the same way as Fisker Automotive, choosing to make their products overseas.
    (more)
  • Mike Schläue~© 2012/09/11 21:12:58
    Mike
    +1
    yup and if the reinvestment act of 2009 was in place , they would not have gotten that money , but due to the fact the repubs shot the bill down, that how those corps were able to do that. the devil is in the detail. and some are left out so they can twist the truth to suit their needs
  • Schläue~© Mike 2012/09/11 22:03:28
    Schläue~©
    "... the devil is in the detail."

    Your own words and did it ever occur to you that ANY bill is made up from many different sections, contains far more than what Rachel Maddow wants to talk about and there are many different reasons they get shot sown?
  • Mike Schläue~© 2012/09/11 22:16:26
    Mike
    +1
    sometimes you have to take the good with the bad, thats what makes politics so messy, but to ignore everything is a good way to kill everything
  • Schläue~© Mike 2012/09/11 22:22:30
    Schläue~©
    Problem is,... in 2009, somebody was walking around with the attitude of "I won",... had Congress in his pocket and the GOP had little if any control over what happened.
  • Mike Schläue~© 2012/09/11 22:27:12
    Mike
    +2
    i would believe that if the Republicans would not have filibustered 400 times in those two years that was actually a world record BTW
  • Schläue~© Mike 2012/09/11 23:04:00 (edited)
    Schläue~©
    "I recognize that the filibuster can be used for unfortunate purposes. However, I am also aware that the Founding Fathers established the filibuster as a means of protecting the minority from the tyranny of the majority -- and that protection, with some changes, has been in place for over 200 years."

    -- Senator Barack Obama (D-IL), 2005

    Yeah,... that number is all over the place depending on who is spinning it. Fact is, a lot of that claim is misplaced because they weren't filibusters but 'blue slips' and many bills were run though more than once.
    However, the true number is far less and here's an excerpt from Huffington Post (not exactly a GOP friendly site) and the link to the full article.
    http://www.huffingtonpost.com...

    "In the 110th Congress of 2007-2008, with Republicans in the minority, there were a record 112 cloture votes. In the current session of Congress – the 111th – for all of 2009 and the first two months of 2010 the number already exceeds 40. The most the filibuster has been used when Democrats were in the minority was 58 times in the 106th Congress of 1999-2000."
  • Mike Schläue~© 2012/09/11 23:13:41 (edited)
    Mike
    because the democrats saw what was coming down the pipe and in 2000 what happened 200- 2008 was the time we saw all that we had stolen from us , then we had to bail the bastards out that did it, we got screwed as he came in and as he left
  • Schläue~© Mike 2012/09/11 23:41:10
    Schläue~©
    You need to study up on how long ago the seeds for the meltdown were planted and the orchestrated collapse of the housing market.

    Start with LBJ, converting Fannie Mae into a publicly traded entity getting them off the Federal govt's ledger, creating Freddie Mac so Fannie wouldn't become a 'too big to fail' monopoly and then study both CRA's Clinton's repeal of Glass Steagall and so-forth.

    That should keep you busy for weeks.
  • EdVenture Schläue~© 2012/09/11 21:27:19
    EdVenture
    +2
    Schlae, The Solyndra was initiated by bush, not that obama hasn't taken that posture but in an effort to ramp up manufacturing in this country on the cusp of an emerging industry.
    My experience with wind generation and generators which ge is noted for is 5 years behind in back orders for the product. My client was forced to go with Chinese suppliers because the could commit delivery in one year for 13 1MW generators. Even Canada was back-logged and couldn't guarantee delivery.
    The loan guarantees were designed as an incentive to attract private investment financing but the resistance and obstructionism by the edison companies have undermined all the efforts throughout the process. No natural gas supplies have compromised the endeavor and feasibility of the projects.
  • Schläue~© EdVenture 2012/09/11 22:38:23
    Schläue~©
    Oops,.... did you forget that all funding for Solyndra had been put on hold while Bush was in office because they were on shaky ground without any good indication they would be able to repay any future $$$ ?

    0bie ignored all of that, fast tracked them anyway, sent Joey down there to celebrate and the rest is history.

    Bush also did what he could to help the auto industry and the they got $17 Billion to hold them over. That was an opportunity for the unions and companies to figure out where they went awry, renegotiate the contracts and reorganize.

    However, the unions knew their savior was on his way to DC and if they stalled a little while, a windfall would be coming their way to prop up their pension fund without renegotiating a thing. Of course, the shareholders got screwed out of their retirement savings in the process,... but what did they care?

    One thing T. Boone Pickens found out the hard way after investing $1 Billion out of pocket,... wind farms were looser. Something that nobody wants to mention are the costs associated with the whirlybirds.

    Have any idea how much it costs to excavate and fill a foundation with concrete to support each one? It's the equivalent of 210 standard 'cement' trucks, not to mention all the mining of the aggregate, lime, cement and sand.
    Actual cost plus the environmental cost opened up Mr. Pickens' eyes and now he's stuck with 250+ units that nobody wants.
    Natural gas is the winner.
  • EdVenture Schläue~© 2012/09/12 00:55:25
    EdVenture
    I have been in construction for 30 years which included several moderated subdivisions and commercial properties including one 20MG wind farm which is on the books right now ready to go. Problem is competing energy providers deliberately underselling the power to undermine investor confidence. I have dealt with most of it or worked with others jointly in this field.
  • Schläue~© EdVenture 2012/09/12 01:04:00
    Schläue~©
    Fact is, if they're able to provide the service/product at a more affordable price, that's a good thing for the consumer and should tell you something.
  • EdVenture Schläue~© 2012/09/12 01:24:39 (edited)
    EdVenture
    That would be fine if there were a level playing field and not intended to eradicate our industrial base. The power of tariff should be employed to protect and encourage grwth in this sector here in America or we'll have no jobs for million of people. Also the outsourcing which has shown its ugly face in the form of unemployment set record numbers under your guy Bush, with tax incentives, another reason to be pissed at him.
  • EdVenture Schläue~© 2012/09/12 01:08:29
    EdVenture
    I could not resist re-visiting and commenting further on your Solyndra comment and tax payer loss, I would think that if u find that disturbing and i think its just a spin, u would be upset about the $50 Trillion dollars lost under Bush which caused a world wide recession to be more upsetting, In addition to the $!B tarp and bail out resources the tax payer had to pick up, they also had to forfeit jobs (a living),, pensions and any equity in their property if they still own it. They can now only wonder what the future holds for them.
  • Schläue~© EdVenture 2012/09/12 01:18:35
    Schläue~©
    $50 Trillion? Was that a rabbit out of a hat or what?

    Outside of a few Billion AIG and some other smaller banks still owe on TARP,.. it has been the ONLY thing over the past 4 years we actually got paid back on, WITH interest.
    GM still owes $25 Billion on their side-loan and we will never see a dime from Fannie & Freddie.

    THAT's disturbing.
  • EdVenture Schläue~© 2012/09/12 02:04:18
    EdVenture
    The no was 35 Tril by 2009 while still diving, recently JP Morgan admitted and revealed another 2.6 trillion which economists argue is likely 4Trill. The losses sustained were not just those we saw it was the share holders depositors pension funds and assets of the banks. These losses are liquidity losses and don't consider the sales losses to the consumer, growth, retail and services industry not to mention the tax revenues associated with them. My point is that Solydra pales to that.
  • Schläue~© EdVenture 2012/09/12 02:30:40
    Schläue~©
    Oh,... you're referring to all that imaginary $$ floating in cyberspace, fiat dollars and the echo chamber aka Ft. Knox.

    So,... what does any of that have to do with Bush?
    Is there some stack of Executive orders he signed that nobody knows about, yet they somehow brought about decades of orchestrated collapse?

    Ever hear of Glass Steagall and why historians will rip Clinton to shreds?
  • EdVenture Schläue~© 2012/09/12 02:52:50 (edited)
    EdVenture
    That was a big mistake, with the purpose of giving cover to JB Morgan for its questionable accounting practices that essentially expanded non-disclosure, creative risk/loss accounting and a springboard for the financial sector to get on the bandwagon, sponsored by Gram of Texas, Bush continued to sign legislation regarding credit card cos and financial sector that put the vault into hyper drive. The groundwork was established by Reagan. It was a GOP congress for Clinton.
  • Mike EdVenture 2012/09/11 22:50:41
    Mike
    +1
    nice rebuttle
  • Roger47 2012/09/11 20:05:00
    Unemployment goes up because...
    Roger47
    +6
    Cutbacks in government spending lead to layoffs of government employees. Cutbacks in aid to the unemployed and disabled leads to lower consumer spending by members of those groups. With all of those people spending less, retailers and manufacturers do not need as many employees, so they lay off emplloyees. Then those employees no longer spend as much. What you get is an economic death spiral.
  • Schläue~© Roger47 2012/09/11 20:33:00 (edited)
    Schläue~©
    And by allowing the outrageous salaries, perks and pensions for government employees, it keeps stacking up until the entire system crashes all at once.
    Compound that with forced unionization of the private sector and the problem is magnified.

    At what point does common sense prevail and the necessary hits are taken to rein in the promises that are unsustainable?
  • Roger47 Schläue~© 2012/09/11 20:35:55
    Roger47
    +3
    You don't cut back during a recession, or what you get is a depression. And that leads to bigger deficits than you would have had without the cutbacks.
    By the way, your blame of unions for the problem is incorrect. Germany has the highest percent of union workers in the world. And they have one of the strongest economies in the world.
  • Schläue~© Roger47 2012/09/11 21:05:09
    Schläue~©
    Germany doesn't have the same form of gov't , they aren't catering to millions of illegals, they don't tolerate essential service employees striking, nor do they have the Chitcago mob influence the union pigs in America has.

    You can keep kicking the problem down the highway and make excuses all you want, why public sector employees are overcompensated for doing a pathetic job compared to their private sector counterparts,.... but now is the best time to trim the fat that has been accumulating since the 1930's before the arteries become clogged.
  • Sport_G... Schläue~© 2012/09/11 21:15:07
    Sport_Geoff
    +1
    Roger summed up the liberal mentality......like most he believes the reason Obama failed is because we didnt let him piss away more money than he did.
  • Sport_G... Roger47 2012/09/11 21:14:08
    Sport_Geoff
    I guarantee that if we spend this money unemployment won't go over 8%. Well, 6 trillion dollars later and it's still over 8% because the 6 trillion was pissed away into Obama campaign donors pockets. Perhaps had the money been put to better / proper use things would be different but Obama used taxpayer money to pay Wall Street Bonuses, Union vote payoffs, and green energy scams that created jobs overseas. This is what happens when you elect someone who has never done anything except mooched of the government through one scam program or another and has ZERO experience in business.
  • Tee Quake 2012/09/11 20:02:48
    None of the above
    Tee Quake
    +2
    Austerity and cutbacks aren't connected to unemployment figures as far as I can tell. They are methods for the government to save money by increasing the suffering of the people.
  • JMCC Tee Quake 2012/09/11 20:10:57
    JMCC
    +4
    If you stop spending money, someone somewhere is going to lose their job...

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