Street Economics Q4 2010

Dorothea Lange

Fed Chairman Ben Bernanke says it could be four or five years before unemployment gets back to what we once viewed as acceptable. How are millions of unemployed people going to cope until then?

Our society isn't structured to cope with long-term unemployment at that level. Health care reform focused on broadening the availability of insurance, not how to pay for it. The unemployment insurance system is crumbling under current demand and too many lawmakers view it as welfare. It takes two W-2 wage earners to support each Social Security recipient but there are fewer people on the payroll almost every day.

When the economy crashed in the 1930s medical care was pay-to-play and if you lost your job your only hope for an income was another one. People starved to death. It's not that ugly today on a national scale because there are enough supports under the pier to prevent total collapse.

But are they adequate to handle the weight for four or five more years without some serious re-engineering?