It's cracking me up how Krugman is trying to pretend that a so-called stimulus package to create jobs hasn't been tried yet. Much like Climategate, they think if they just don't mention it then it doesn't exist.
Posted on 11/30/2009 7:29:54 AM PST by SeekAndFind
If you’re looking for a job right now, your prospects are terrible. There are six times as many Americans seeking work as there are job openings, and the average duration of unemployment — the time the average job-seeker has spent looking for work — is more than six months, the highest level since the 1930s.
You might think, then, that doing something about the employment situation would be a top policy priority. But now that total financial collapse has been averted, all the urgency seems to have vanished from policy discussion, replaced by a strange passivity. There’s a pervasive sense in Washington that nothing more can or should be done, that we should just wait for the economic recovery to trickle down to workers.
This is wrong and unacceptable.
Yes, the recession is probably over in a technical sense, but that doesn’t mean that full employment is just around the corner. Historically, financial crises have typically been followed not just by severe recessions but by anemic recoveries; it’s usually years before unemployment declines to anything like normal levels. And all indications are that the aftermath of the latest financial crisis is following the usual script. The Federal Reserve, for example, expects unemployment, currently 10.2 percent, to stay above 8 percent — a number that would have been considered disastrous not long ago — until sometime in 2012.
And the damage from sustained high unemployment will last much longer. The long-term unemployed can lose their skills, and even when the economy recovers they tend to have difficulty finding a job, because they’re regarded as poor risks by potential employers. Meanwhile, students who graduate into a poor labor market start their careers at a huge disadvantage — and pay a price in lower earnings for their whole working lives.
(Excerpt) Read more at nytimes.com ...
1) Such a program should shy away from measures, like general tax cuts, that at best lead only indirectly to job creation, with many possible disconnects along the way.
2) More Federal aid to states to help avoid both a drastic worsening of public services.
3) A small-scale version of the New Deal’s Works Progress Administration, one that would offer relatively low-paying (but much better than nothing) public-service employment.
4) He mentions the Economic Policy Institute, a progressive think tank, which argues that spending $40 billion a year for three years on public-service employment would create a million jobs, which to Krugman sounds about right.
5) A tax credit for employers who increase their payrolls.
Krugman agrees that all of this would cost money, probably several hundred billion dollars, and raise the budget deficit in the short run. But this has to be weighed against the high cost of inaction in the face of a social and economic emergency.
DISAGREEMENTS, REFUTATIONS WELCOME !! ( and remember, you are arguing against the winner of the Nobel Prize for economics /s ).
Hold on a minute...I thought BO’s PORK bill was going to guarantee us an unemployment rate of NO HIGHER than 8%.
Where are the media analyses and criticisms of such a massive failure on BO’s part?
Quick, raise cap’n taxes and healthcare mandates on evil corporations ...
In some ways, I agree with him. Tax cuts work in principle, but it is beyond that now. There are people who have wiped out every possible avenue for revenue. Unemployment gone, savings gone, IRA and 401K gone... the tax break for those who increase payroll seems like a fairly good idea though.
You know it’s bad when McDonalds has a hiring freeze as it is in our area right now.
The budget office says that in the absence of a stimulus plan, the unemployment rate would rise above 9 percent by early 2010, and stay high for years to come.
Grim as this projection is, by the way, it’s actually optimistic compared with some independent forecasts. Mr. Obama himself has been saying that without a stimulus plan, the unemployment rate could go into double digits.
Well, Mr. Obama was as wrong as wrong could be.
The budget office says that in the absence of a stimulus plan, the unemployment rate would rise above 9 percent by early 2010, and stay high for years to come.
Grim as this projection is, by the way, it’s actually optimistic compared with some independent forecasts. Mr. Obama himself has been saying that without a stimulus plan, the unemployment rate could go into double digits.
Well, Mr. Obama was as wrong as wrong could be.
I guess Obama’s trickle down economics aren’t working. Whoda thunk that sending billions to banks, financial firms, and state agencies but none to the working man or private business would cause a jobless recovery?
It's cracking me up how Krugman is trying to pretend that a so-called stimulus package to create jobs hasn't been tried yet. Much like Climategate, they think if they just don't mention it then it doesn't exist.
krugman is such a hypocrite!
Now, who said the following? “My prediction is that politicians will eventually be tempted to resolve the [fiscal] crisis the way irresponsible governments usually do: by printing money, both to pay current bills and to inflate away debt. And as that temptation becomes obvious, interest rates will soar.”
Seems pretty reasonable to me. The surprising thing is that this was none other than Paul Krugman, the high priest of Keynesianism, writing back in March 2003. A year and a half later he was comparing the U.S. deficit with Argentina’s (at a time when it was 4.5 percent of GDP).
Has the economic situation really changed so drastically that now the same Krugman believes it was “deficits that saved us,” and wants to see an even larger deficit next year? Perhaps. But it might just be that the party in power has changed.
The budget office says that in the absence of a stimulus plan, the unemployment rate would rise above 9 percent by early 2010, and stay high for years to come.
Grim as this projection is, by the way, it’s actually optimistic compared with some independent forecasts. Mr. Obama himself has been saying that without a stimulus plan, the unemployment rate could go into double digits.
Well, Mr. Obama was as wrong as wrong could be.
Krugman is such a hack!!!!
The working man got the nationalization of GM with partial UAW ownership.
OK OK, we read it. No need to post the same material three times.
This guy envies Jim Cramer...he think he can change his opinions on a dime, sometimes twice a day, without anyone calling him on it. He is a complete hack. His opinions could be formulated on a dartboard.
The first stimulus failed because it wasn’t big enough ?? Mr Krugman, the bulk of the money lies UNSPENT.
Ping later. Krugman was for the last stimulus but claimed it was too small. There is NO amount of democrat national debt he thinks will be a problem. Of course debt due to tax cuts on businesses is bad, to him.
Out of all the smarmy, self-anointed East Coast elites, he’s got to be on my top 3 most hated list. Someone needs to bitchslap that smirk off his filthy sewer.
And what sense it that, Mr Krugman ? GDP ? The GDP number has been artificially inflated by govt spending to give the impression there is economic activity. And even that had to be revised downward. There is no growth in the private sector.
Oh, perfect. Let's go out and spend $120,000 for each job we create. While this is better than Obama's current price tag, it's still the wrong approach. It's the same old bigger government approach to the problem.
While I'm no Nobel Laureate, I do have a Ph.D. in economics and the solution is not rocket science. First, make a permanent cut in both personal and business taxes. This would change peoples' expectations about the amount of money they have for large purchases. Giving people a one-time $250 check does nothing for long-run consumption planning. Indeed, most people seem to have paid off debt or saved the Obama rebate. A real and sustained cut in personal income taxes allows people to make larger purchases (e.g, homes, cars, college education, etc.) that might be financed by borrowing. The temporary crap we're seeing out of Washington does nothing for the necessary change in consumer behavior that we need.
Business tax credit? You're pushing on a string, Paul. Why should businesses that are losing money and have massive tax write-offs as it is respond to a tax credit? Make a permanent cut in taxes, however, and they know that, over the years, it pays to hire more people because consumers now have more money from the (newly passed??) tax cuts to buy their goods and services. It's no accident that the fastest growing economy in the world right now (Ireland) also has the lowest corporate tax rates (about 15%). You idiots in Washington should take the hint...
Won't this affect the deficit? Gees, Paul...where the hell were you when Obama lavished $750 BILLION in handouts of my tax dollars? Also, you might want to read up on the Laffer Curve, which shows that tax cuts generate HIGHER, not lower, tax receipts. This is no pie-in-the-sky White Paper...it's exactly what happened after the Kennedy and Reagan tax cuts, and is also born out by the experience in Britain and India.
So why doesn't Washington do this? Because giving away yours and my money buys them political power. And until we wake up and throw them all out on their ass--Democrat and Republican alike--and convince them we REALLY are fed up, all we can expect is more of the same. It's time to start working the political process to change this message, starting with the 2010 primaries.
It's time to get PO'ed, people, 'cuz nothing's going to change until we do send the message to Washington.
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