|Americans Are Jobless and Scared - The Government Must Spend More to Kickstart Our Economy
By Robert Reich
UNEMPLOYMENT WILL ALMOST certainly in double-digits next year -- and
may remain there for some time. And for every person who shows up as
unemployed in the Bureau of Labor Statistics' household survey, you
can bet there's another either too discouraged to look for work or
working part time who'd rather have a full-time job or else taking
home less pay than before (I'm in the last category, now that the
University of California has instituted pay cuts). And there's yet
another person who's more fearful that he or she will be next to lose
In other words, ten percent unemployment really means twenty percent
underemployment or anxious employment. All of which translates
directly into late payments on mortgages, credit cards, auto and
student loans, and loss of health insurance. It also means
sleeplessness for tens of millions of Americans. And, of course, fewer
purchases (more on this in a moment).
Unemployment of this magnitude and duration also translates into ugly
politics, because fear and anxiety are fertile grounds for demagogues
weilding the politics of resentment against immigrants, blacks, the
poor, government leaders, business leaders, Jews, and other easy
targets. It's already started. Next year is a mid-term election. Be
prepared for worse.
So why is unemployment and underemployment so high, and why is it
likely to remain high for some time? Because, as noted, people who are
worried about their jobs or have no jobs, and who are also trying to
get out from under a pile of debt, are not going do a lot of shopping.
And businesses that don't have customers aren't going do a lot of new
investing. And foreign nations also suffering high unemployment aren't
going to buy a lot of our goods and services.
And without customers, companies won't hire. They'll cut payrolls instead.
Which brings us to the obvious question: Who's going to buy the stuff
we make or the services we provide, and therefore bring jobs back?
There's only one buyer left: The government.
Let me say this as clearly and forcefully as I can: The federal
government should be spending even more than it already is on roads
and bridges and schools and parks and everything else we need. It
should make up for cutbacks at the state level, and then some. This is
the only way to put Americans back to work. We did it during the
Depression. It was called the WPA.
Yes, I know. Our government is already deep in debt. But let me tell
you something: When one out of six Americans is unemployed or
underemployed, this is no time to worry about the debt.
When I was a small boy my father told me that I and my kids and my
grand-kids would be paying down the debt created by Franklin D.
Roosevelt during the Depression and World War II. I didn't even know
what a debt was, but it kept me up at night.
My father was right about a lot of things, but he was wrong about
this. America paid down FDR's debt in the 1950s, when Americans went
back to work, when the economy was growing again, and when our incomes
grew, too. We paid taxes, and in a few years that FDR debt had shrunk
to almost nothing.
You see? The most important thing right now is getting the jobs back,
and getting the economy growing again.
People who now obsess about government debt have it backwards. The
problem isn't the debt. The problem is just the opposite. It's that at
a time like this, when consumers and businesses and exports can't do
it, government has to spend more to get Americans back to work and
recharge the economy. Then - after people are working and the economy
is growing - we can pay down that debt.
But if government doesn't spend more right now and get Americans back
to work, we could be out of work for years. And the debt will be with
us even longer. And politics could get much uglier.
© 2009 Robert Reich's Blog