JOIN VT | NEWSLETTER
VETERANS TODAY ON : FACEBOOK | TWITTER | FORUM
|

The Great Recession, Jobs and the Deficit

As the Labor Dept report released today revises upward the number of estimated job losses incurred during the Great Recession, economist Paul Krugman warns that a politically motivated focus on short-term deficit reduction is dangerous, assuming the objectives of creating more jobs and slashing long-term future deficits.

Krugman says today that so grave is the crisis that:

[F]ear-mongering on the deficit may end up doing as much harm as the fear-mongering on weapons of mass destruction.

Let’s talk for a moment about budget reality. Contrary to what you often hear, the large deficit the federal government is running right now isn’t the result of runaway spending growth. Instead, well more than half of the deficit was caused by the ongoing economic crisis, which has led to a plunge in tax receipts, required federal bailouts of financial institutions, and been met — appropriately — with temporary measures to stimulate growth and support employment.

The point is that running big deficits in the face of the worst economic slump since the 1930s is actually the right thing to do. If anything, deficits should be bigger than they are because the government should be doing more than it is to create jobs.

Christopher S. Rugaber AP piece on the Labor Dept report is excerpted below:

WASHINGTON (AP) — Job losses during the Great Recession have been huge and they’re about to get bigger.

When the Labor Department releases the January unemployment report Friday, it will also update its estimate of jobs lost in the year that ended in March 2009. The number is expected to rise by roughly 800,000, raising the number of jobs shed during the recession to around 8 million.

The new data will help illustrate the scope of the jobs crisis. Analysts think the economy might generate 1 million to 2 million jobs this year. And they say it will take at least three to four years for the job market to return to anything like normal.

‘It’s going to take a long time to dig out of this hole,’ said Julia Coronado, senior U.S. economist at BNP Paribas.

Wall Street economists expect the January report will show a tiny increase of 5,000 jobs. That would be only the second monthly gain since the recession began. But it probably wouldn’t be enough to hold down the unemployment rate, which is forecast to rise to 10.1 percent. That would match October’s 26-year high. And it would be the fourth-straight month of double-digit joblessness.

The Labor Department’s revisions on employment levels are done every year. They are based on unemployment insurance tax data that companies submit to states.

Jobs remain scarce even as the economy is recovering: Gross domestic product, the broadest measure of the nation’s output, has risen for two straight quarters. GDP rose by 5.7 percent in the October-December quarter, the fastest pace in six years.

But hiring is still lagging. Many economists say businesses are reluctant to add workers because it’s not clear whether the recovery will continue once government stimulus measures, such as tax credits for home buyers, end.

The debate over health care reform and the scheduled expiration of some Bush administration tax cuts at the end of this year may also cause companies to restrain hiring, many economists said.

[Worth recalling are George W. Bush and Dick Cheney's pathological and nihilistic policies that brought us here; Bush-Cheney in 2002 self consciously reversed the projected elimination of U.S. public debt, in favor of throwing the government into fiscal crisis.]


Related Posts:

Short URL: http://www.veteranstoday.com/?p=13823

The views expressed herein are the views of the author exclusively and not necessarily the views of VT or any other VT authors, affiliates, advertisers, sponsors or partners. Legal Notice

Posted by on Feb 5 2010, With 0 Reads, Filed under Economy. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.
Apply for VA Loan Now Advertisement Get Educated at Excelsior College Get Educated at Excelsior College Get Your Loan Now Get Your Loan Now Get Your Loan Now Apply for your VA Home Loan Now Apply for your VA Home Loan Now Apply for your VA Home Loan Now Apply for Jobs on HireVeterans.com Now Apply for Jobs on HireVeterans.com Now Apply for Jobs on HireVeterans.com Now Become a Consultant

COMMENTS

To post, we ask that you login using Facebook, Yahoo, AOL, or Hotmail in the box below.
Don't have a social network account? Register and Login direct with VT and post.
Before you post, read our Comment Policy - Feedback


Comments Closed

3 Comments for “The Great Recession, Jobs and the Deficit”

  1. I am very , very afraid that we have not seen anything yet. Once the elites realize that taxing them greatly is not negotiable all sorts of ultra right wing legislative nonsense will be brought to the House and Senate floor to protect their ill gotten gains. There could be great violence.

  2. I expect the elitist mob to pull out the stops..after all we vermin deserve to be wacked..and they have the means and gov officials to do it..

    They should be afraid of the millions without jobs..but a large portion of those layed off still blame the left and the poor and unions and Socialites for this mess. they still swoon at the verbal garbage being spouted at them from the GOP and their propaganda ministry..
    I for one do not understand how they can believe the bile spewed into the airways..Maybe its easier..something psychological, to blame the weak..for needing help from the wealthy and to believe that they must protect the rich from this “Socialist” threat…after all most
    ( lower cast ) Republicans think that they are on the winning track and will be rewarded..and become part of the (upper cast thieves). I hope they are good at holding their breath..there’s not chance they’ll get the invite.
    The threat to the elites is much reduced when you count out the faithful from those holding them accountable.

  3. Potomac Oracle

    We need to enjoy the long winter as much as we can because conditions are now ripening for a very hot Spring, Summer and Fall.

    Conditions auguring the inevitable social unrest run the gamut from:

    1. 20 million unemployed and looking, no longer looking, underemployed. Real
    unemployment at 23% http://www.shadowstats.com.

    2. Feeding America reports that there are more than 37 million people, one in eight
    Americans — including 14 million children and nearly 3 million seniors.– going
    hungry every day.

    3. Due to the slumping economy, only one in three teenagers will have a job this
    summer. Anthony Mason reports (http://www.cbsnews.com/video/watch/?id=4233387n)
    on the lack of employment for this nation’s youth….4 million 16-21 year olds
    looking for summer jobs.

    4. 48 million families below the poverty level.

    5. 50 million without health insurance.

    6. 63% of pubblic grade school teachers buying food for hungry kids

    7. 3/5 of all jobs lost during this recession were cuts from small businesses

    8. 30% of all small business commercial loans will not be refinanced or rescheduled.

    9. Commercial foreclosures will increase. About $814 billion in commercial
    mortgages — for apartment houses, office buildings, shopping centers,
    warehouses and hotels — are expected to mature this year through 2011, with
    $250 billion due this year, according to Foresight Analysis.

    That means borrowers will have to raise more equity, which is expensive, or
    lenders will have to foreclose or extend loans, hoping values will rise again..

    10.Those firms that go under will contribute to unemployment, residential
    foreclosures, and burdens endured by the poor.

    11.The “Too Big To Fail” syndrome will be repeated and even more money will be
    handed out to these fraudsters.

    12.Sales of weapons and ammunition have skyrocketed nation wide.According to FBI
    statistics, there were 12.7 million background checks on prospective gun buyers
    last year, compared with 11.2 million the year before. While checks typically
    increase toward the end of the year, they spiked sharply at the end of 2008. The
    figures show a 27 percent increase in the last three months of 2008 over 2007.

    All of the above contributes, significantly, to the disenchantment of the public with the Administration and Congress over policies on jobs, health care, energy, and war. The sparks of anger now flying will be fanned into flaming rage by radical groups seeking what ever attention they can for their points of view.

    I hope I’m wrong. Right now there’s just too much evidence pointing to the high likelihood of social unrest. Even if there were no potential for civil unrest immediate mitigation of the above conditions would be the order of the day. How to get there is not a difficult step where elected officials accept the fact that we are in an emergency. A crisis. Indeed we are facing a situation that poses a clear and present danger to this nations stability.

    Financial constraints posed by traditional fiscal and monetary policy must be abandoned for the unconvential but perfectly workable alternative of monetizing the debt of national, state and local governments. Only that debt that is government-to-government or represented by bonds issued for public sector investments should be monetized.

    Government should then capitalize, again through monetization, public assets such as transportation, parks, buildings, etc. This would capitalize a state-owned bak which would then have credit creation capability with which to fund infrasturcture programs, health, education and other social saf=ety net programs reduced by cuttbacks during the recession.

    These funds could be allocated interest free. http://www.webofdebt.com/articles/fiscal_responsibility.php

    Another alternative since inter-bank interest rates are near zero, the President could declare a moratorium on debt service payments on exisiting and new debt for the next three years. The nearly $300 billion saved could should be reallocated to the states for employment and feeding programs.

    There is a way out, we need only have leaders who lead us to the light of progress and resist shrinking further into the cave of darkness and destitution.

Comments are closed

 

Email Newsletter icon, E-mail Newsletter icon, Email List icon, E-mail List icon Join Our Daily Newsletter
  View Newsletter ARCHIVE

WHAT'S HOT

  1. Former Prisoners of War – You Are Not Forgotten
  2. Veterans Encouraged to Sign Up For Creative Arts Competition
  3. Egypt Military Rejects US Threats & Braces for General Strike
  4. Top 10 Veterans Stories in Today’s News – February 10, 2012
  5. Did JFK Nail an Intern a Day, Ask the GOP
  6. Veterans File for Class Certification in Chemical, Biological Weapons Testing Case
  7. Act Up Against ACTA
  8. The 2012 Voting Experience – The Most Important of a Lifetime
  9. NATO Killed Children in Afghanistan
  10. DOD Opens More Jobs, Assignments to Military Women
  11. Media Whore Awards Show; The Nominees Are:
  12. Militia Group Finally Going to Trial
  13. U.S. Department of Defense Contract Awards for Feb. 09, 2012
  14. Bamboozeled- The NDAA Trojan Horse
  15. West’s Shenanigans against Syria, Iran
  16. Top 10 Veterans Stories in Today’s News – February 09, 2012
  17. New Online Enrollment Application Available for Servicemembers
  18. Army Looks to Ensure Consistent PTSD Diagnosis
  19. All We are Saying is Give Justice a Chance and All We are Doing is Telling Truth
  20. Chat I Just Had With Homeland Security
  1. nexus5: ron paul would disagree with current plans to forcibly retire so many senior people with no benefits or...
  2. Jim W. Dean: Guys, like I covered in the piece…I was not going to touch this at first, even with the intern....
  3. AntiZ: It would be an idea for the Egyptians to demand all their relics and artifacts back from the US and Canada...
  4. norml: Why is the camp issue so vital to every human being? Because confinement is the final step before...
  5. nexus5: The deep dark secret of the homosexual community is the high percentage of its members that seek out sex with...


Apply for VA Home Loan Now!



SubscribeVT Radio Home Page







Archives