Tuesday, July 1, 2014

Our Economic Woes and Their Cure

Our greatest economic woe is that not many people around the world are buying our goods like they were before 2008. The reason is that there is large-scale unemployment in most places. This coupled with a large amount of debt, carried by governments, pension funds, and individuals, have left people and governments searching for solutions.
For individuals and families, financial austerity is the answer, but all too many governments around the world are applying this same logic by cutting services to their citizens. Another solution offered is to reduce federal and local debt by raising taxes on the wealthy. So far, I haven’t seen these job creators create jobs. President Obama has tried several stimulus plans to get these job creators moving, but, with one exception, no one will create jobs until they see customers. That exception is the federal government.
Businesses will not create jobs until they see customers. They won’t see enough customers until unemployment is reduced. This is a problem without a solution unless the federal government steps in and creates jobs. This will create jobs, then customers, then the expansion of other businesses, and finally greater tax revenue to pay off the debt.
This cure not new. After over a decade of limping along after the great depression, prosperity returned when the government had to tool up for WW2. Some projects can be: installing fiber optic cables in all cities, building a countrywide high-speed rail system, reworking our electric grid, subsidizing green industries, etc. True some existing industries will suffer, but just like the buggy-whip makers of old, they will have to find ways to adapt to the changes or fade out of existence.



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