WASHINGTON, Oct. 4, 2009 -- September brought the sobering news that unemployment now stands at 9.8 percent, the highest level of job losses hit since 1983, as Friday's dismal job loss report sent a catastrophic blow to optimists who say the economy is back on track.
But the job loss trend continues: Jobless numbers have risen for 21 straight months, the longest stretch since the Great Depression.
Today, 15 million Americans are out of work, and a third of that group has been unemployed for 6 months.
How much worse is the job situation going to get and for how long?
"Well, it's very difficult to make judgments at a time like this, largely because we don't have so many incidents in history to be able to compare it to," according to former Federal Reserve chairman Alan Greenspan, an exclusive guest on ABC's "This Week with George Stephanopoulos."
"My own suspicion is that we're going to penetrate the 10 percent barrier and stay there for a while before we start down," Greenspan said.
Greenspan's last appearance on the show was back in August, when he dismissed talk of a collapse, saying, "We've already seen the bottom."
Now, two months later and with the employment rate still rising, Greenspan has tempered his positive outlook.
"The job report was pretty awful, no matter how you looked at it," Greenspan said. "Indeed, not only, of course, did the unemployment rate go up, but I was particularly concerned about the number of Americans who have been unemployed for six months or longer. ... That went up sharply in September."
Despite the job report, Greenspan said his view on economic growth is even more bullish than what he predicted during his last appearance on "This Week" back in August.
Greenspan Says Economy Will Grow Faster Than His Previous Prediction
Greenspan now expects economic growth in the third quarter to hit 3 percent, higher than his previous forecast of 2.5 percent.
STEPHANOPOULOS: Back in August, you thought you would see about 2.5 percent growth in this quarter. Do you still hold to that or do these numbers make you change that view?
GREENSPAN: No. The numbers are coming in higher than that.
STEPHANOPOULOS: Higher than that?
GREENSPAN: Oh yes. It looks as though it's going to be 3 percent, maybe even possibly even higher. The problem with knowing what the third quarter is going to look like is we won't get all of the data for several months. So a lot of -- there is a lot guesswork involved. But it's on track, at this stage, for more than 2.5 percent.
STEPHANOPOULOS: So more than 2.5 [percent]. So does that mean we're heading towards a situation where you could actually see an end to the job loss or not quite yet?
GREENSPAN: Well, no, I think we're getting close to that.
For the full exchange and transcript, click HERE.
Greenspan said the "silver lining" in the job loss report is "economic activity," but warned that the loss of job skills in the economy due to prolonged unemployment could be an "irretrievable loss" for the economy.
Bipartisanship Over Unemployment Benefits
With millions of unemployed Americans expected to lose unemployment benefits later this year, Greenspan said he's supportive of extending unemployment benefits, a point also supported by "This Week" exclusive guests Sen. Chuck Schumer, D-N.Y., and Sen. John Cornyn, R-Texas.
As two key members on the Senate Finance Committee, both senators were in agreement over what to do to assist the growing number of Americans out of work.
Both said they think the Senate should pass an extension of unemployment benefits, COBRA and the $8,000 tax credit for first time homebuyers. Schumer said the Senate would act this week on unemployment benefits.
Senate Likely to Extend Unemployment Benefits This Week
"We're going to pass a bill this week, put it on the floor," Schumer said. "I believe it will pass. It will extend unemployment benefits for four weeks for all states and another 12 or 13 weeks for all states above 8 percent [unemployment]."
The House has already passed a bill that would extend benefits to Americans currently unemployed.
But Schumer said the Senate version would "go beyond what the House was. We think that, you know, 8 -- you have 8.5 percent unemployment, that's pretty bad, and you ought to get some help."
Both Senators also agreed that "throwing money at the problem" is not the answer, though.
"I think there are things we need to do to help people who need help, like unemployment benefits and the like," Cornyn said. "But I think throwing more money at the problem and racking up more and more debt for children and grandchildren is not the answer."
Questions Over a Second Stimulus
During his address Saturday, President Barack Obama acknowledged his concern over the climbing jobless rate and said he's exploring "additional options to promote job creation."
The president's remarks have raised the question whether the administration is rethinking about recovery efforts, possibly laying the groundwork for a second stimulus package.
On "This Week" today, Greenspan said he does not think there's a need for a second stimulus and warned that doing too much would be counterproductive.
"I think the focus has got to be on trying to get the economy going," he said. "But also have to be careful in trying to do too much would be counterproductive."
With 60 percent of the existing stimulus funding still to come, Greenspan said he is taking a "wait and see" approach.
In the second portion of the show, Schumer and Cornyn wouldn't commit to supporting a broader second stimulus. Cornyn said the stimulus isn't working and used Friday's record-high job loss report as proof.
"Well, I think the stimulus so far has been unsuccessful in achieving the goals the president set out for it," Cornyn said. "[Obama] said, with the stimulus, we'd seen 8 percent -- no higher than 8 percent unemployment. And we now see, with 60 percent of the stimulus unspent, that that has not been successful. We're going to see unemployment over 10 percent."
Government Debt Has Americans 'Scared,' Cornyn Says
Cornyn said the American people are "scared" that spending and the debt is being "racked up."
"Forty-three cents out of every dollar spent in Washington today is borrowed," Cornyn said. "And the American people are justifiably concerned, even scared, that the spending and the debt that's being racked up. And unfortunately, the health care issue threatens to make matters worse, not -- not better."
Schumer said the current stimulus is working but stopped short of endorsing another one, saying the full effect of the government effort is not yet clear.
"So before doing a second stimulus, let's see how the rest of the 60 percent works and try to deal with the pain of some people in terms of the job front, where John and I agree, and in certain targeted areas of the economy, such as housing," he said.