The reason the economy is doing so poorly is too little government spending, as Paul Krugman and others who understand contemporary economics have argued for years.
And just in case anyone doubts it, here is a some data published last month by the Wall Street Journal:
The Labor Department’s establishment survey of employers — the jobs count that it bases its payroll figures on — shows that the government has been steadily shedding workers since the crisis struck, with 586,000 fewer jobs than in December 2008. Friday’s employment report showed the cuts continued in April, with 15,000 government jobs lost.
But the survey of households that the unemployment rate is based on suggests the government job cuts have been much, much worse. … It marks the largest decline on both an absolute and a percentage basis on record going back to 1948. …
The unemployment rate would be far lower if it hadn’t been for those cuts: If there were as many people working in government as there were in December 2008, the unemployment rate in April would have been 7.1%, not 8.1%.
Back to you, Obama for America re-election team. Oh, wait. Anyway, more starkly, Scott Brown has been voting against jobs programs for Massachusetts residents as fast as he can, and Mitt Romney wants to lay off even more police, firefighters, and teachers, which of course will make the economy even worse, although it may result in lower taxes for the very richest of the 1%. (Hat tip for this trip down last month’s memory lane: The Big Picture.)
I have been informed by other people on BMG that government employees are highly educated and can make more money in the private sector, hence the need for obscene benefits like pensions and retiree health insurance after a long, long ten years of service. So I am sure they are not on the unemployment line, that is the good news.
What would the federal deficit be if Obama paid for all these laid off employees? We all know the states are broke and can’t afford it. Do we beg China? Ask the 1% for more money? Harvard making a contribution?
Does anyone care about the 15 trillion dollar debt and growing? Also, let’s be honest. Romney wants to focus on the private sector economy, so taxes from those people can be used to hire more public employees, if they are needed. Obama needs to do the same.
Now that we have gotten that cleared up, as to the deeply reality-challenged substance of your post, please bring yourself up to date on the way the world economy works, since virtually all of your economic commentary has been proved wrong, however amusingly, by market events since 2008, then resume posting. This is for your own good, unless you are a member of the 0.1%, in which case your cynical self-interest is duly noted.
You must have visted Yankee Staduim, since you work at Columbia. You must agree with me, right? I was at the new Yankee Staduim, what a wonderful place to watch a game.
If I was part of the 1%, I would be living in Lexington or Weston, possibly Cambridge.
Why would any sensible person want to do that? Maybe it would be of interest in an anthropological way, or as a warning, kind of like Scared Straight. Your antipathy to Fenway Park, like that of Scott Brown, is remarkable, however deeply out of step with Massachusetts. I hope you make it to Cambridge some day: it is one of the finest places to live in the world. Waltham is pretty nice too, though: stay strong.
I had no problem with Fenway until I visited Yankee Stadium. Seats were large, elbow room, isles were wide, every seat could see the field, etc. At Fenway, if the guy sitting next to you is over 200lbs, he bleeds into your space. I felt like I was a first class citizen at Yankee Stadium going to Fenway is like going camping and I ain’t interested.
An article by Nick Gillespie discusses the Private/Public employee issue in depth and does a good job debunking Paul Krugman – and no he doesn’t just blame Obama he blames Bush also.
The Greece public sector accounts for about 40% of GDP.
And we have bailed out the people of that state through massive subsidies in the form of Social Security payments and many other forms of federal transfer funding that in the case of Greece the state government is solely responsible for. As a result, our economy is healthy relative to that of the EU, and Las Vegas, capital of our Greece, is much better off than Athens. But it would be even healthier is we spent more, as the WSJ graph shows.
This recession is affecting human beings, our greatest economic asset. We have lost their ability to create wealth for the nation. Wealth is solely the product of human endeavor and skipping over this fact keeps us in the hole we’re in. Public workers, many of them your neighbors, family, or friends, when laid off an income stream is cut off. It is a very technical response that they are better off than some poverty stricken area of India and wonder why they are complaining. A quick look into what you call obscene is reasonable coverage(still with significant co-pays and deductibles) and pensions that average about 30 to 50 thousand a year. Many are not entitled for Social Security since their payments went into their pensions(yes they paid for it). It is disconcerting that we make our fellow citizens and taxpayers pariahs because someone shortchanges us. This is a very destructive approach to societal problems. It is a mark of past failed civilizations. It is not reasonable to be part of a society and then through no fault of your own get punished for it. Taxes and government are at their lowest in years and yet a trillion dollars sits on the sidelines waiting for the “proper incentive.” So much for the private sector turning things around. They believe in the freebie market instead of the free market. They are sunshine patriots who are in love with raw non-utilized greenbacks instead of what it can actually produce to make their country where they also live a better place to live in. They define their space no further than their front gate and fight environmental improvements tooth and nail. This attitude eventually leads to such a sequestration of money that its scarcity in the economic life of people is what is causing hardships. Government becomes a reluctant partner to infuse cash because those that can do more are too chicken to take a modicum of risk that will put little dent into their lifestyle. The banking crisis showed they suffered very little during this latest downturn. How about putting them in your sights as you grumble about the world. They have always been the fount of boom and bust times.
…but certainly plenty more can than currently are, which has a stimulative effect because those people will spend their money in the private sector thus increasing the need, availablity, and abilty to fill private sector jobs. Keep in mind that government employment runs the spectrum from the cushier positions you describe all the way down to just this side of minimum wage. (Just browse http://www.usajobs.gov to see that this is true.) We should do a combination of deficit spending and raising taxes on the 1% in order to grow the economy. A key reason this recession is worse than most others is because we are simultaneously cutting public jobs whereas others did not.
Prior presidents masked their growing economies by hiring more government workers. But it is time to pay the bill now. Again, 15 trillion debt, 70 trillion in obligations, and this is just on the federal side.
Even the voters of California recently rejected tax increases to close their $20 billion hole. People are not buying the old line the budget cuts will come five years down the road. My God, we can’t even cut funds for public television!!!
We had been paying the bill at the end of the Clinton years — remember that surplus? Then what happened… oh yeah, that’s right, GWB called for a massive tax cut on the rich. Sure enough, the economy didn’t grow by enough to make the tax cut revenue neutral, and we went into massive deficit spending again.
It’s funny how folks like you only think it’s “time to pay the bill” when Democrats are in office.
Public television is a fantastic investment – the programs produced enrich us all, for very little money when compared to tax breaks for oil companies!
oil is great
Now is most definitely not the time to pay the bill – that can be done during good times. It was not all that long ago we did it, under President Clinton the rich were paying a little more, employment was up, inflation was down, and we had a surplus. Not like there’s any mystery here.
The last few booms were fueled by bubbles, the S&L bubble bursting in the late 80’s, Clinton had the dot-com bubble, and W the real estate bubble.
If you want to go back to Clinton era tax rates, do we get his energy prices too? Don’t forget, we paid less than $1 a gallon for many of years of his term. Reagan had cheap oil too. I would argue there’s lots of economic growth with cheap energy. Now will you swap?
IMO, nobody’s taxes should go up until the waste is wrung out of the budget, including sacred cows like public TV, earmarks, wars are ended. Let Ron Paul at the budget, and see how many ideas of his we can adopt.
To really fix the budgetx, we need term limits for congress, and the POTUS should only serve one, five year term. That way, they get things done and not worried about the next election.
That was no bubble – that was a systematic looting of the FDIC. Republican deregulation strikes again!
of Rep St. Germain (Dem, RI) putting through the increase in deposit insurance from $34k to $100k in the waning days of the Carter Administration. Plenty of blame to go around there.
no, we don’t get his energy rates. He didn’t get the incredible efficiencies made thanks to information technology and computers, or any other advances over the past few decades.
P.S. Thanks to energy efficiency gains, while the price per unit is up, the number of units of energy needed per unit of gdp is way down. That’s both because of the tremendous international economic value for tUSA’s services in banking, Hollywood, and dozens of other areas, and because everything from manufacturing to transportation require less fuel than they did 20+ years ago.
P.P.S. That you would put public TV, earmarks, and wars in the same sentence as “waste” underscores how little sense you make. PBS is on the order of $430M. Iraq and Afghanistan get funded by things like $37B supplemental bills. PBS is chickenscratch. The reality is that folks who take your position will never be satisfied — you’ll always find some government spending to call waste and argue for no tax increases to pay for the deficit or debt until your so-called waste is eliminated. Which will never happen.
Cant even cut funding for Big Bird, people get up in arms. Truly hopeless.
and rather than embrace it and fix it, we hear about it only adding up to “chicken scratch”? Haven’t you ever been on the other side of one of these arguments? If it’s only a little waste then FIX IT! If nothing else it will take the wind out of the sails of the person making the complaint.
How much would we have to increase taxes to pay to get those government workers back? Wouldn’t those tax increases take money out of the private economy and raise unemployment in the private sector?
Basically, it is like this.
We are all in a toboggan going down a steep cliff. Some use us want to slow it down and begin to maneuver it out of harms way. Others just want to enjoy the ride before it crashes.
is sitting on $2 trillion in profits – time they gave some of it up since they aren’t doing anything with it. Oh, I know, how dare I confiscate the hard earned money of the corporate layabouts. It’s just awful isn’t it?
And that’s the thing that really irks you – having to pay-anything at all.
How about cutting taxpayer subsidies to oil companies, or let’s just knock off the baloney about property tax cuts to corporations in exchange for hiring – they only use it against cities and towns the way Dillinger used banks.
and the market is suffering from it. Let’s require all people with 401Ks to pick some stocks, funds… and get their money back in play. It’s just awful isn’t it?
.
Individuals and business don’t need savings for tough times do they?
While Ford saved billions and made it through the great recession – GM spent billions and had to be bailed out by the US government.
But 401K’s looked pretty awful in 2008-2009 as they always do when the music stops and a crash ensues.
You wanna be really helpful? Lay some hot stock tips on us.
The banks first responsibility is to not lose the money. If they thought they could get a return on investing they would be investing.
The average savers are putting their money into cash accounts even though the weak dollar is robbing them. Why? Because putting your money into business right now is a riskier investment.
pathetic (BOA – 0.30% for 12 months – $10K minimum). If you’re thinking of buying a CD, at least go buy a US Savings Bond with better interest.
My point is most people (certainly me) would be outraged if the government told me to put my money back in the market (That’s my money). Why should companies feel any differently? So there’s $2 trillion sitting on the sidelines, why should they get back in… because you/government wants it back in play. Why should they risk “their” money? They are extensions of us and in many cases, they are us.
Keep posting, very insightful, i love it. I hope Demintfan doesn’t smear you with name calling.
And you won’t let the taxpayers spend money-
Then there will be no revovery – and, for that matter, no economy either.
It is interesting that you are willing to risk my money in 401K’s but are unwilling to risk your profits.
Remind again of the social value of Wall Street?
I thought you were busy teaching that dog of yours to puke.
Can you believe that guy saying Obama’s kids should get preferential treatment over white kids from Apalacha? I’m sure you felt like puking when he admitted that to me.
I can’t believe it because he didn’t say it. You, on the other hand, have said quite enough.
But if you go back, I asked him point blank if wealthy minorities should get preference over kids in poorer communities since he strongly supports affirmitve action.
Besides avoiding my easy question, he tells us how society has progressed since the 50’s and that those programs must continue. At least my idea of using zip codes to target those less fortunate would be fair to all, and likely gives us the same desired results.
If you want Demintfan, at your next social gathering, you can use my idea and claim it to be your own, I don’t mind.
invents the zip code.
I’ll tell everyone!
Im thrilled you agree we should take the race question off all college applications. Just tell the other guy to stop living in them 50’s.
Dan.