Tags: unemployment

Woodhill: 14 Percent Unemployment Looms

Monday, 13 Jul 2009 07:57 AM

By Gene Koprowski

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The economic policies the Obama administration is enacting have worsened joblessness and the unemployment rate may climb as high as 14 percent within a year, unless the course is reversed, Louis Woodhill, a member of the leadership council of the Club For Growth, wrote in a syndicated column.

"The current 9.5 percent unemployment rate is causing great economic pain, and life with a 14-percent jobless rate would be much, much worse," Woodhill wrote on RealClearMarkets.com.

"Unfortunately, almost everything that the government has done, or is proposing to do to right the economy, is actually counterproductive."

The Obama administration in recent days has said it’s waiting for the stimulus to take effect and generate millions of new jobs.

"It should not hold its collective breath," Woodhill wrote.

"Stimulus is based upon the superstition that government borrowing and spending creates demand. In reality, it does no such thing. Stimulus is like trying to raise the level of the Hudson River by dipping out a bucket of water, walking five feet downstream, and pouring it back in."

The unemployment rate is based on private business investment (PBI), Woodhill wrote. Private business investment declined by 37.3 percent during the first quarter of this year.

"It takes a five percent, year-over-year increase in PBI to produce a one percent increase in the number of jobs. A five percent decrease in PBI will yield a one percent reduction in total employment," Woodhill wrote

A year ago, during the last summer of the Bush administration, the unemployment rate was just 5.5 percent, he wrote.

But deficit spending by the Obama administration has worsened things, and will continue to do so, Woodhill wrote.

According to a report on Fox News, the Obama administration is likely to continue going down the deficit spending path.

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