The only way out of the vicious economic cycle is for government to adopt an expansionary fiscal policy — spending more in the short term in order to make up for the shortfall in consumer demand. This would create jobs, which will put money in peoples’ pockets, which they’d then spend, thereby persuading employers to do more hiring. The consequential job growth will also help reduce the long-term ratio of debt to GDP. It’s a win-win.
This is not rocket science.
Robert Reich, Vicious Cycles: Why Washington is About to Make the Jobs Crisis Worse (via underpaidgenius)
Actually, I disagree. There’s a disconnect between what the government does and the actual job creation (notice how you almost never hear anyone talk about literally how a government encourages job creation?*). The “job” cellphone call is dropped by corporations—the so-called “job creators.” They seem to be in a fetal position, refusing to spend any of their profits on actually hiring people. They’ve already got a shitload of money, so what can the government do to persuade them at this point? Nothing.
In short, we’re screwed until big business can start to understand their place in the American eco(nomic)system.
*The always interesting Planet Money podcast once talked about what governments can do to actually encourage job creation—which is not much. All they can do is “create an environment in which companies would want to invest” (I’m paraphrasing). In other words, government has already done all it can do at this point. It’s up to SOMEbody to make the first sacrifice and us workers have nothing left to sacrifice—big business, however…
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