When you think about it, unemployment insurance gives people a way to purchase items and continue life and at the same time stimulate the economy. What they buy determines who will stay employed. So if you are buying a TV or a toaster, someone in China gets to keep their job.
Most of what we consume is made in a foreign country; clothing, appliances, cosmetics, footwear, car parts, tools. We still produce our own food, autos and housing. And “by God everyone deserves to own their own home” ---and we know where that went. Now we have cash incentives to buy homes, cash for clunkers, and the old standby, food stamps for those with no cash at all.
Right now the United States is a service economy. We don’t make ANYTHING! It is not hard to figure out our economic future. Our manufacturing base moved off shore because of the cheaper labor. There is little or no incentive to move back to the US, either. The US consumer is addicted to cheap foreign products. How do we stimulate our economy by buying stuff made in Asia? How can we compete against countries that have no health insurance or retirement benefits or unemployment insurance? Imported goods have to rise in price, in order for domestically produced goods to be profitable. The real question is: what sort of industrial production is going to come into play to put people back to work?
“Buy American” might be the final solution. Congress is doing their part (printing money); it now takes eighty US dollars to buy a barrel of oil when it used to take thirty. Put another way, the thirty dollars you put in your IRA 20 years ago won’t even buy half a barrel of oil today.
The President and his men are claiming that we are in a recovery. Bernanke is claiming that we averted a great depression. It's what people want to hear, but sadly it isn’t based in reality. Their solutions are most probably part of the problem. It’s a little like a hooker with VD; you keep quiet about medical problems, it’s bad for business.