Front page headline is “Spike in layoffs stuns economy” with a sub-head “Government stimulus funds are drying up and consumers are keeping their wallets closed.” The article reports “New applications for unemployment benefits hit a nine-month high last week – a spike the suggests private employers may shed jobs this month for the first time this year.”
WATCHDOG: During its consideration, we maintained the Recovery Act of 2010 was not sufficiently directed to generating jobs within 24 months and we risk a double dip recession, if not a full scale depression. Later we called for a second stimulus bill of equal size and better directed to generating jobs.
Concerns about adding to the deficits are misplaced. During times of prosperity people pay taxes and, if we stay out of dumb wars such as Iraq, we will be able to pay down the debt as we did during the Clinton years.
Nothing is as wasteful as people being out of work. Moreover, that causes a greater deficit due to transfer payments in the form of unemployment compensation and other social programs to feed and house families.
A properly directed new stimulus bill will put people back to work restoring our nations deteriorating infrastructure. Once people have jobs and a brighter future, they will start spending again and a virtuous economic cycle will commence.
The Watchdog is absolutely correct.
What is so mind numbing is the repetition (ad nauseum) of simplistic, irrelevant, and/or erroneous, economic cliches like “deficits are always bad, spending cuts are always good, tax cuts are always good, the wealthy create jobs, etc etc.
Plus, there is the equally irrelevant ideological cliches like the absolute good of smaller government, freedom of the marketplace, personal responsibility, entitlements are bad etc.
By mouthing these many slogans, many people believe they are actually saying something important without ever feeling obliged to make a clear and compelling argument as to just how the slogan works in this particular time and place. It seems like all that is unnecessary is the slogan, which, by some sort of magic, makes it all very clear. It never does.
Then, of course, we have the people who know better but whose interests are served by this no-nothing-ism and are happy to promote it with their corporate assets and government bail-out money. This huge (wonderfully financed) mass media amplification of error makes error more and more the accepted “wisdom”, an example of “the big lie” theory in action, i.e speak the error long enough and loud enough and everyone tends to believe it.
If the conservative argument is correct I want to hear their argument not slogans. How will making the tax cuts permanent either reduce the deficit or create jobs. Warren Buffett said recently that the pat answer of “trickle down” has not worked in the last ten years and “people are starting to catch on”.
Business and personal wealth invests in plants, equipment, and jobs to meet market demand and demand is, and has been, shrinking. A consumer based economy needs consumption, and this has been dealt a huge blow. Its not just the current ack of decent jobs (millions of which are never coming back) but the loss of hundreds of billions of dollars in decreasing home values and outright foreclosures. Home equity has been the personal “piggy bank” for millions and now that is virtually over.
The solutions are not simple and that may be the worst part of the story because no one in this “sound bite”, anti-intellectual, angry, ideologically mind locked, and vested interest, culture can handle anything but absolute simplicity. No one has the humility to say they may not understand economics sufficiently and even if they did we have all been lied to so often and by so many that trust is non-existent, so we take our own opinions as “fact”.
But in economics, as in many fields, facts, correct assessments, and competent remedial action, really matters. Errors have consequences and the consequences of error may be catastrophic! Recession is one thing, depression is another.
Believe it or not. . . religion actually enters directly into the picture in dealing with these difficult economic situations because many people (millions) believe that the free market, the “invisible hand” of un-fettered capitalism, is like one of the ten commandants of God and unbelievers (i.e Democrats and other heretics) should be driven from the country as a diabolical influence. Religion has the added advantage of never being wrong, because, if the God given, orthodox, classical, capitalistic principles are followed, no matter where we end up, Eden or a dung heap, we will be in the exact place God has ordained for us as either as reward or punishment.
I certainly believe religious values should inform economic decisions as many other decisions we make, but religion in the US is a hybrid where false religious principles, ie. “free market capitalism” not only informs economic decisions but dictates them, and does so with the authority of God.
No wonder so many vested interests are laughing, actually howling with laughter, “all the way to the bank” as they take our jobs and homes and future with them. Ha, Ha, Ha. God help us!