The unemployment rate just hit 7.2%, the highest since 1993. It’s hard to imagine what this country must have been like in the early ‘30s with unemployment at 25%. And I can’t even figure out which way to root for the next wave of stimulus programs. The op-ed page of the Times today had the perfect competing bookends for all the arguments I’ve been hearing.
David Brooks summarized the research (including a book by Obama’s incoming head of the Council of Economic Advisors) that says there is zero evidence to show any of this stuff actually works. And then right across the page there is Paul Krugman, who just won a Nobel Prize, ferkrizakes, saying that Obama isn’t going to spend enough.
I can't stop wondering: what is this country going to do when all these bills come due right about the time the baby boomers start totally overwhelming the social security and Medicare funds? Oh, and by-the-way, China has already begun reducing the amount of U.S. debt they are willing to buy.
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5 comments:
Paul Krugman said a few months ago that the a lack of trust was feeding the fires of recession. FDR said the only thing we have to fear is fear itself. Right now everyone is afraid to spend money, banks are afraid to loan money and the economy is grinding to a halt. Nobody knows what the catalyst will be that will restore faith in the system and hope in the future. The stimulus will not turn the economy around but perhaps it will keep things moving until faith and trust return.
25% unemployment and a huge amount of underemployment in the depression is impossible to comprehend.
No one knows. There's been too many "Ooopps! moments" by the experts, and no one can seem to agree on which direction to go -- too little or too much.
I hope I'm wrong, but it seems like the only thing that will get 'stimulated' is the government, as we watch it get bigger and more bloated. The jobs they're looking to create are mostly government make-work.
You can't shovel water out of the deep end of a pool to raise the level at the shallow end.
Let us pray...
I suspect that the real number of unemployed is much higher than what's being reported. Given the number of undocumented workers that toil in the contruction and other trades taking a huge hit, my guess is that we can double the number of unemployed and be closer to the truth.
I have know idea whose right Brooks or Krugman. Like most things, the answer is probably right in the middle. Anybody that was counting on social security and medicare in their old age really needs to rethink that strategy.
To kgwhit's point, it's a crisis of confidence we're in, not a crisis of liquidity.
Carpet-bombing America with federal spending won't change that. Obama saying wow we are on the verge of financial apocalypse and have to spend more than anybody has ever tried before at once won't change that.
In fact, it makes it worse. Companies are laying off workers in part because they see it's not good now but also in part because the government and media is telling them it's going to get worse.
It's a self-fulfilling prophecy. Bernanke and Paulson are really the guilty ones since they've talked about the Depression ad infinitum.
Obama badly needs to take a page from the Reagan playbook. Tell everybody it's gonna OK. It's morning in America (well 2AM in America, but morning's coming soon) That we CAN do it. Instead of freaking out in public and taking steps that will bankrupt us and still may not work.
Doesn't anybody understand marketing in the government anymore?
Obama is right, It will get worse before it gets better.Better economic brains than I, seem to think we can spend our way out. He is going to put 3 million people to work right away Doing what I have no idea.I guess we will see what organized labor has to say.Maybe the American people are starting to realize that they can do with less. For so long we have needed the newest,most advanced objects that come down the pike. Be it auto's, time shares, big vacations, stainless home appliances.Maybe the new world we see in the morning is the old world we left behind the one that was kinder,more simple and safer and people had a little more humility about them.
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