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AP: There Will Be No Christmas Without Unemployment Extension

BEGIN TRANSCRIPT

RUSH: FYI, if we don't extend unemployment benefits, this country will be over. It's a worse circumstance than 2008; we needed to do the TARP bailout or else the world financial system was over. I'm not kidding you, it's in the AP today -- we don't extend unemployment benefits, there won't be Christmas.

BREAK TRANSCRIPT

RUSH: Do you ever...? Folks, do you ever look around and see people getting older and you don't think it's happening to you, but you see it in everybody else? It's something that happens. It's just weird, and sometimes you see people acting older even when they don't look older. I don't feel a day older than when I started this program 23 years ago. Well, it's just weird. Anyway, here's this AP story: "If Congress lets unemployment benefits expire this week for the long-term unemployed, they won't be the only ones to feel the pain. The overall economy would suffer, too. Unemployment benefits help drive the economy..." You know what this is? This is a fax. This is a fax. It's either from Pelosi and the White House and AP just ran it.

I think this is a fax from some Democrat and they're just repeating it. I have heard all of this. I have heard this from Pelosi. Listen to this: "Unemployment benefits help drive the economy because the jobless tend to spend every dollar they get, pumping cash into businesses. A cut-off of aid for millions of people unemployed for more than six months could squeeze a fragile economy, analysts say. Among the consequences they envision over the next year" if the benefits aren't extended. "Annual economic growth could fall by one half to nearly 1 percentage point. Up to 1 million more people could lose their jobs. Hundreds of thousands would fall into poverty. "'Look for homelessness to rise and food lines to get longer as we approach Christmas if the situation can't be resolved,' says Diane Swonk, chief economist at Mesirow Financial. ...

"That money ripples through the economy, into supermarkets, gasoline stations, utilities, convenience stores. That allows those businesses to hire more people, who, in turn, spend more money." No. There's no history to prove that this works. If it did, we would not have an economic problem. The answer to this would be: Everybody just quit their job and go on unemployment. If unemployment compensation benefits were the way to stimulate economic growth, then why would anybody work? Look, I know. This is easily nuked. This is not the point. The point is the AP printed a fax. This is a fax. I'm telling you, folks, this is talking points from some Democrat, either in the White House or Nancy Pelosi's office or whatever.

She said this in almost these exact words: These unemployment extension benefits have gotta continue because it propels the economy. She said something like for every dollar of unemployment benefits there's $1.39 benefit in spending in the economy. "'If you've been unemployed for six months, you've gone through your savings,' says Heidi Shierholz, economist at the Economic Policy Institute. 'You have no choice but to spend (benefits) immediately.' By contrast, money given to higher-income families -- say, through tax cuts..." (sighs) I tell you, my gaskets are not going to hold today. They are not gonna hold. Nobody is "given" money with a tax cut. Money does not start in Washington! It's not there and then Washington gives it to people!

This is... Well, it's lame, it's stupid, and it's insult. Let me read this whole thing. "By contrast, money given to higher-income families -- say, through tax cuts..." Really? People go out and work, right? Let's say somebody earns a hundred grand a year, and their taxes take away $30,000, so they net $70,000 -- and then we get a tax cut. So the government, according to this idiocy, says, "Okay, we're gonna give you a tax cut, so we're gonna send you 5,000 additional dollars at the end of the year. We're gonna give you $5,000." That's not what happens! (shouting) What happens is that less money is taken from them at the time they earn it! Sorry for yelling. I can't help it here. "By contrast, money given to higher-income families -- say, through tax cuts -- tends to deliver less economic benefit because those taxpayers typically save a big chunk of their windfall."

No, they don't because the next story is all about how the savings rate stinks! (groans) I mean, the absolute, abject ignorance in this story. Is there one more excerpt that I want to read? Oh, yes. "For most recipients, the average $300 weekly unemployment check doesn't go very far: It covers just half of basic household expenses, according to the National Employment Law Project." The theory is they're gonna spend it all. Okay, but where do they get it? This is so rudimentary. My dog would understand this after one lesson. I wouldn't have to re-teach this. My dog would understand this in one lesson! Here it is very simply: The American people who are working pay taxes, that money goes to Washington, and people who lose their jobs get unemployment benefits.

Where does that money come from?

That money comes from people who are still working, and from the businesses that hire them and fired them. So the unemployment check that they get takes AWAY from people already working. There's not a net addition of dollars added to the economy because people are out of work. It's just the exact opposite. All we're talking about here is a transfer of money from people who work, so they end up with less, to people who aren't working so they have some. It's a wash. There's no new money in the economy. There's no economic growth taking place. A different group of people are doing the spending -- and all the while, everybody is getting poorer! It's simple. That's it.

But, no, not to listen to this stupid story from the embarrassing AP. I mean, it's so stupid, I don't know how to explain it to you. Let me try here on the fly, as AP views the world. The government is in Washington with a giant stash of money. Benevolent Democrats decide who will earn what, and at the end of every month benevolent Democrats send some people a hundred thousand dollars, $10,000, $5,000, $20,000 -- and the government sends some people $2 million a year because you realize that no matter what you earn the government is giving it to you. That's how you get it! It's coming from the government. And then you can get even more if you can convince the government to give you a tax cut.

At that point, somebody like Tim Geithner is gonna get your name on a list and say, "This person just got a tax cut," and Geithner is gonna say, "Okay, I'm gonna write them an additional $5,000 check next month and I'm gonna send it to 'em." But then we get to the people who are unemployed and, for some reason, they don't have any money 'cause the government somehow forgot about 'em. People aren't working, they lost their jobs, and so they have nothing. Somebody's gotta send Geithner a note, "Hey, guess what? Enos Slobodnik here just got fired at Walmart and now he's got nothing." Geithner says, "Don't worry, we'll send him some money."

"And the money we send Enos Slobodnik is gonna be far more valuable to him 'cause he doesn't have any, and he's gonna spend it all," and, voila! We've got massive economic activity. Well, while we're doing this we can't send any more money to other people out there because it isn't fair, because there are other people that don't have any. Therefore, the people that we're giving X we're not gonna give any more to but the unemployed we're gonna give them some. So we're gonna take from our stash over here and we're gonna give to these people, and therefore we're gonna pump an additional $300 a week per person into the economy from our stash here at the Treasury -- and therefore we're gonna have economic activity.

The AP doesn't think to ask, "Mr. Geithner, where does that stash from?"

"Well, that's the government's stash. Everybody knows that."

"Yeah, but Mr. Geithner, where do you get it? I mean, you have that pile of money here and you're giving Bill Gates -- for some reason, I don't know -- $48 million a year, and you're giving somebody else $150,000. Okay, I don't know why you're doing this but you're giving all these different amounts of money. Where's that money coming from, Mr. Geithner?"

"Well, we print that money."

"Oh, is that where it's coming from? That's the money? Okay, so Bill Gates has his money 'cause he's getting it from you? Warren Buffett? Everything Warren Buffett has is because somebody in government decided to give it to him all these years?"

"Well, yeah. That's how it works."

I'm saying even my dog would understand that's not how it works because that stash of money, none of it exists until somebody earns it -- and that happens by virtue of somebody willing to pay it to somebody for the work that they're doing. Well, anyway, there you have it. If we don't extend these benefits there won't be a Christmas, and there might not be a country. (chuckles) This is one of those days I just wish I had not even awakened. Honest to God, I wish I hadn't.

BREAK TRANSCRIPT

RUSH: I have not had one class in economics since high school in the 1960s -- not one -- and I understand more about this through my own self-education than these wizards at the AP. And I'm still convinced they just repeated it. They just printed a fax from Pelosi's office or whatever. You know, if I didn't have a stronger constitution I would look at a story like this and say, "You know what? It isn't worth the time. I've made my score; I'm outta here. I'm an utter failure." After 23 years and we still get trash like this in our major, #1 wire service. I guarantee you whoever wrote this story is an absolute, abject ignoramus. I don't know about you, folks, but I don't like being surrounded by stupidity.

I just don't. I used to suffer fools pretty well, but I don't anymore. I just... (interruption) Well, I don't know. It is entertaining. (chuckles) I just got a note from somebody watching on the Dittocam: "This is hilarious, Rush! Why, I'm rolling on the floor laughing myself silly here watching you explain where libs think money comes from." (laughing) It may be funny to listen to but, folks, this is worse than depressing. We're talking about the country here. You put this in the same show with these sound bites of Boehner and Cantor today after meeting with The One? "He loved us. He really loved us!"

God, save us.

END TRANSCRIPT

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