What not to do when your economy is tanking

posted by Louise Auerhahn

Sunday, June 8, 2008, at

On Friday, the U.S. Bureau of Labor Statistics reported that the nation lost 49,000 jobs in May, while unemployment jumped to 5.5%: the biggest one-month jobless increase in 22 years. The U.S. economy has now lost a total of 324,000 jobs since this past December, and 8.5 million Americans are out of work.

Between the housing market meltdown, rising prices, and falling consumer spending, the state of California has been one of the hardest hit by the nation's economic woes. Millions of Californians are struggling to afford gas and food, make the mortgage payment, and generally keep their heads above water.

So how is our Governor proposing to respond to an economy in crisis? (Continued...)

By cutting back on work supports, making it harder to get health care, pushing big cuts for schools, and dropping services for elderly and the disabled.

Here's an analysis from the California Budget Project showing how many Californians would be impacted by a few of the Governor's May Revise budget proposals. I've also pulled out the impacts just on Santa Clara County. K-12 isn't included; statewide, the cuts there would total $665 per student for 2008-09.

If the raw numbers aren't convincing, check out Patty Fisher's column in the Merc last week for the story of one working mom's struggle to navigate the system.

Not only are these proposals a recipe for short-term disaster -- cutting off work and family supports just when we need them the most -- but by hacking away at education and aid for children, short-sighted reductions like these threaten our state's future economic competitiveness. And as the New York Times points out, looming cutbacks in state and local government spending will deal another major blow to the national economy, possibly even prolonging the recession into 2009. Let's hope Schwarzenegger wises up.

Maybe Arnold is taking a page from George Bush's playbook: in an equally baffling move in the middle of a recession, Bush is threatening to veto an extension of federal jobless benefits for the 1.6 million people who have been looking for work for more than 6 months and are about to exhaust their state unemployment benefits.

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