Quote:
Originally Posted by ijusluvit
I am still amazed by questions such as this last one: "How are jobs created?"
There is only one answer: By the expenditure of investment capital.
Often in US history, there was an abundance of capital expenditure. Virtually everyone who had 'extra' money, especially the wealthy, invested it. In the last century however, there were two exceptions: The Great Depression and the Great Recession. During the Depression, investors lost a lot of money because of poor financial regulation. Jobs only returned when the government funded huge infrastructure projects, which then turned profits for companies, which then stabilized the economy as private investment replaced public investment.
The Great Recession of 2008- is a little different because only a segment of investors lost their fortunes, but again, because of poor financial regulation. Many of those who still retain their fortunes are simply sitting on those investment funds because they are 'afraid', or more likely, just because they can. Why invest when you gain only a little in these low interest times, and, when you could lose it, like some of your peers have? So we have a repeat of the 1930's, and the obvious answer is that the government must jump start the process, once again, by funding large scale infrastructure and R&D projects. The subsequent reemployment of millions will convince private investors to join in with their start ups and expansions. The economy will stabilize. When it does, the government can back off on public investment again and move toward surplus and deficit reduction. If it's too 'scary' to pay for public investment strictly by adding to the deficit, then taxes must be raised. THE MONEY MUST COME FROM SOMEWHERE.
As long as Republicans will not budge on any increase in the deficit or any increase in taxes for anyone, there will be NO NEW JOBS.
What could be more simple.
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This is not my area of expertise by any stretch but I think what you say is very true but most economists, as I understand them, feel that that time has passed us by. Most I have read feel that should be done at the beginning of a recession to pump liquidity back into the economy and BOTH parties agreed with that if you recall that began even before Obama took office in 2009 in concert with the prior administration.
We can argue HOW that was done and to whom the money went to later.
Most economists that I have read feel that at this point in the recession and we are in really deep do do (do not know if you read the links I posted on the depth of the unemployment in this country),,but anyway, they feel now reduction of the deficit is the big thing because continuation of increasing the deficit is EXTREMELY damaging in the long term.
You mentioned Republicans and I would prefer to stay away from that part.....and just tell you what I have read....we are well beyond stimulating what is wrong in this country.
PS....to your point on being allowed to increase the deficit. In June of this year, the government pulled in the most for any June since 2007 (260 Billion) but spent 320 Billion versus 293 Billion a year ago. I cannot imagine how we can continue on this path. The time for stimulus is past and was blown in my opinion. We will have a deficit of over 1 Trillion by the end of this year, the FOURTH consecutive year. That, and a very serious and disconcerting jobs problem is very discouraging. In my opinion, we need to quickly re work the tax code (that will satisfy the call for the rich guys blood) and do it quickly. MOST IMPORTANT to me is the the next President must get both sides talking. Current President has proved he cannot do that and in fact we are much more polarized than before. Not sure if Romney could do it either frankly, but the current occupant has shown that he cannot. I would love to be optimistic but we have not had this kind of financial woe ever and we continue to promise more and more from the federal government.