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Another question about government assistance

Many people are losing their jobs. Many people are going on assistance programs. What happens if more people are on assistance then are working? Where does the money come from, and is there a chance the government can run out? Is that when a repeat of the Great Depression happens?

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my4lads

Asked by my4lads at 11:56 AM on Dec. 23, 2008 in Politics & Current Events

Level 2 (10 Credits)
Answers (12)
  • That is a really good question. The value of the dollar is dropping more and more. We continue to print money we don't have. Once we hit a deflation. Which means the cost of goods and services will begin to drop. Lack of demand would spiral into more companies maybe laying off or cutting production. More people would perhaps find themselves in need of assistance, and so on... This could spiral into a much worse scenario.


    About two-thirds of the U.S. gross domestic product is based on consumer spending.  If consumers aren't spending, companies will be laying off.  Deflation continues to hurt the US economy and US business.  Sorry to be doom and gloom, but that is how I see a weak economy only getting worse...


     

    grlygrlz2

    Answer by grlygrlz2 at 12:13 PM on Dec. 23, 2008

  • I have been on assistance b4 my hubby joined the USCG. Once he joined, they stopped giving us assistance. We only got one check to catch up on our bills but they do stop once you start making a decent living.
    Imogine

    Answer by Imogine at 12:19 PM on Dec. 23, 2008

  • Pretty much! When ones debt is greater than their income eventually you become bankrupt...the same thing happens on a greater scale when it is an entire country. There are only so many working people and businesses that can pay enough taxes to support those unwilling or unable to work.

    I live in PA, and one of our local community colleges is offering free and discounted courses for people who have been laid off (thankfully my hubby's job is recession proof), and would like to take the opportunity to further their education/skills, so that when the job market begins to bounce back, they will have advanced and current skills that will not only pay off the course/education costs, but ALSO net them more income in a better paying job--which only leads to more confidence and self esteem! It really is a win-win situation! I think this is a FANTASTIC thing this college is doing!

    When life gives you lemons, make lemonade! :O)
    LoriKeet

    Answer by LoriKeet at 12:35 PM on Dec. 23, 2008

  • Even during the great depression only 28% (I use the term only very loosely) of the country was unemployed. Which conversely means 72% of the country was employed. Right now unemployment rate is 6.7% which means that 93.3% of the country is employed. However, it seems staggering to us right now because for the past 16years our unemployment rate has fluctuated between lest than 1% and 3%.

    So lets say that the housing pit has reached rock bottom, which won't happen until about the end of 2009, and that we have another 6% laid off (which is higher than the current prediction by 2%), and the bailouts begin to work and we invest taxes in infrastructure to create jobs - you could look at this as a correction in the market. And, if you look at historical figures, our dollar though not as strong as 5 years ago, today edged over the euro, pound, and yen, we are still the best of the shakiest economies to bet on.

    Fiveofakind2

    Answer by Fiveofakind2 at 2:46 PM on Dec. 23, 2008

  • Long winded way of saying, don't worry about that part yet. Spend what you can, not more than you can. If we all spend what we can and not more than we can. If we reduce the amount of credit we use so we are spending at a lower constant amount (which is expected) we will do fine.
    Fiveofakind2

    Answer by Fiveofakind2 at 2:46 PM on Dec. 23, 2008

  • They will take it out of the people who are....one of the reasons people who do work are reluctant to work more than 8 hours over time. ITs not worth it. There will always be the "wealthy" that we have done our hardest to bring down with us. Hey, lets tax them.
    momofsaee

    Answer by momofsaee at 3:08 PM on Dec. 23, 2008

  • I agree with fiveofakind. The market is in the process of correcting itself. A lot of people made bad decisions credit wise and the housing bubble burst. (It did have to eventually). The best thing that you can do is live as responsibly as you can and not live outside your means. If everyone does that (sigh) capitalism will take care of itself and in a year we will show positive growth again.
    The problem was, many people were spending WAY more than they made, and banks kept giving more and more credit away to people that couldn't afford it, and people kept taking it.
    Now it's like, O crap, I don't have any money, and with no money, no spending, less spending, less jobs. Stimulus checks really just prolong the problem because they give people money to spend that they won't have next quarter, which messes with the whole balance of things.
    lovinangels

    Answer by lovinangels at 4:49 PM on Dec. 23, 2008

  • That's basically what's happening in Western New York State. There are so few jobs, they are raising taxes, raising welfare 30%. But what are they going to do when we lose more jobs, and we are all on welfare? we aren't that far from it already here. Most of our major businesses around here have closed or are laying off and on the verge of it.
    xxhazeldovexx

    Answer by xxhazeldovexx at 8:28 PM on Dec. 23, 2008

  • This is why Rosevelt did the work program and why he also instituted the assistance program. He knew that when there were thousands out of work and that would mean that many would start looking at communism as a real solution. As in he knew that a revolt would happen if he did not do something. Obama is also, so the rumor mill states, starting work program iniatives. So maybe that will help bring some changes and relief. Let's see.
    frogdawg

    Answer by frogdawg at 9:59 PM on Dec. 23, 2008

  • starting work program iniatives

    Frogdawg, do you have a link for this?
    Anonymous

    Answer by Anonymous at 6:59 AM on Dec. 24, 2008

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