Friday on the Charlie Rose show, mega-billionaire Warren Buffett emphasized that the recovery will remain anemic until the housing industry recovers, which he says will have to await the formation of households outstripping our excessive inventory of houses.
These workers who make up a sizable portion of our work force are scrounging for odd jobs and drawing unemployment compensation and other social safety net benefits to their great unhappiness and strain on their family lives.
Yet the infrastructure of bridges, highways, railroads and public buildings continue to deteriorate and investments for the future are postponed.
President Barack Obama’s Jobs Bill would not only put the housing industry back to productive work but also spur recovery, the same as Buffett envisions for the future when housing starts surge.
It is not an error to borrow money to make prudent investments. It doesn’t make the individual poorer, nor does it make a nation less solvent. The key is how wisely the money is spent. A dollar spent to put an unemployed person to gainful employment is worth about $2.50 in an increase in Gross National Product. (It’s called the ‘Multiplier Principle’.)
There is another issue. Hardship is occurring as the younger generation cannot find well paying job opportunities, is burdened with college bills, and is stuck at home for a place to live. No jobs, no housing, no families, no children… no future! That’s a bleak picture for them and for the nation.
Our nation is predicated on a sense of fairness: Whether rich or poor we are all in this together as American citizen. There have been ample opportunity for talented, hard working young people to do better economically than their parents. Instead, we are becoming two nations…one of the rich and super rich and that of an impoverished middle class and the growing number of the disadvantaged. There is no fairness in this!
For how long will our young people remain quiescent? NewsLanc will report elsewhere today of the beginning of protests which just may grow to match or exceed those of the 1960s and early 1970s over the Viet Nam War. If this occurs, no one can foresee the outcome.
Despite what Buffett has to say, we need to make prudent investments now in order to put the construction industry back to work, to restore and expand our infrastructure, to spur the economy to recovery, and to safeguard the Republic. The implications of sitting around for five years and awaiting a slow recovery (if indeed it comes – after a decade, Japan is still waiting) are too grave.
