Tuesday, February 16, 2010

The Impact of Long Term Joblessness in America

An excellent article in The Atlantic regarding the impact of the current state of joblessness in America. It is a truly sobering read about the significant impact it is having now and the implications for the future.

The final conclusion:
We are in a very deep hole, and we’ve been in it for a relatively long time already. Concerns over deficits are understandable, but in these times, our bias should be toward doing too much rather than doing too little. That implies some small risk to the government’s ability to continue borrowing in the future; and it implies somewhat higher taxes in the future too. But that seems a trade worth making. We are living through a slow-motion social catastrophe, one that could stain our culture and weaken our nation for many, many years to come. We have a civic—and indeed a moral—responsibility to do everything in our power to stop it now, before it gets even worse.

While I concur with his conclusion I am also aware that several states, and the US, are at the end of the borrowing rope and at serious risk of default. Where does the money come from if we can't borrow or borrow what we need, and we can't collect sufficient tax revenues under the current tax codes, let alone considering tax hikes? We are stuck between the proverbial rock and hard place. I am not liking this but I honestly don't quite know how to deal with it aside from taking in family members who find themselves homeless due to foreclosure, and that could indeed happen!


The North Coast said...

There is evidence that government spending on job creation is accomplishing the opposite. The author you cite clearly doesn't understand the role of sky-high deficits in raising taxes, increasing the risk in lending, and creating business uncertainty.

Worse, the spending is going to efforts to re-inflate the bubble and offset bad debt rather than to the industries that could be productive of the products and services we need, and provide jobs and new job niches.

Kheris said...

And that lack of insight regarding deficit spending is troubling. I don't think he realizes just how bad it is. However, overall I do think his assessment is spot on.