The Nobel Prize winning economist, Paul Krugman, wrote an editorial recently making a case that the path to recovery will not occur with the slash and burn austerity measures that seem so dear to congress.
I have always stated that recovery requires job growth and investment not downsizing and lower taxes. Such draconian measures mean fewer consumers, a damaged middle class and increased unemployment. That is not good for the economy, any business, or careers. Such action kills economic growth.
As Krugman said, “…in the economy as a whole, spending and earning go together: my spending is your income; your spending is my income. If everyone tries to slash spending at the same time, incomes will fall–and unemployment will soar.”
My sole disappointment with the Obama Administration is they went along with the downsizing strategy. I looked for Roosevelt era tactics that created government work programs to reduce unemployment and drag us from the economic abyss.
It is clear that the unemployment statistics are less than truthful when they ignore people who have given up looking for work as well as those working in menial jobs and unable to follow their career aspirations.
My suggestion, and not a popular one, is to look for government to do what it does so well – create jobs. The private sector cannot be expected to expand with a shrinking middle class and less business. We must view government as an ally and a partner, not the enemy.
Such an approach is a hard sell to the American public who have been brainwashed to mistrust their government and politicians in general. Obama will have to be a much stronger leader to force through the kind of decisions that must be made to see a realistic recovery from the current economic doldrums.