A Manifesto for Economic Sense

This works for the USA (at least in the short run) our interest rates are low.

For Greece, not so much, they can not just print money (well they could if they leave the EU). I mean where are they going to get the money from?

 

Increase spending via federal assistance to the state/local governments. Just getting the state government workers that have been laid off in the last few years back on the job would have a large impact on the unemployment rate and the economy as a whole. I've seen somewhere that if a stimulus package to the state and local governments were implemented the unemployment rate would drop to 6.5% in fairly short order.

 

We could also restart the military draft and grow the military, maybe the unemployment rate would go down to 4% if we do both.

Old people get their State/city jobs, the recent college grads get a military job, it is a win-win.

 

Isn't increasing the number of government employees simply recycling money?

 

Sure, just like lots of the military spending we do to keep people employed in some districts (and the military aid we give so other countries can buy our stuff).

 

Considering we've already replaced the private sector jobs plus more that were lost in the downturn, the problem with the economy right now is that the state and local governments are in dire straits. Hell, it's not like the state and local governments are cutting the chaffe at this point, they've gone past that point and now it is the basic services like education, police, and fire protection that are getting cut. At this point, the private sector is adding jobs and the job losses are in the public sector. If you want the economy to turn around, it isn't going to be solely through the private sector. It also has to come from the public sector.

 

Is the military not the public sector?

 

Exactly, I find it funny that reps support one and not the other, while dems support the other and not the one.

 

The following statement is going to sound redundant and obvious, but if you want to improve the economy, you have to increase the economic activity. You also aren't recycling the money. The only way that is possible is if the money is taken out of the private sector and put into the public sector. In the case of a stimulus package, you're adding in "new money" that would then be spent by the public employees into the economy, which then increases the amount of money circulating around in the private sector, who then hires more people to meet the increased activity, a portion of which circulates back to the government in the form of taxes.

 

Military is part of the public sector, but implementing a draft simply to create jobs isn't palatable to either party.

 

I would also point out that unless the draft remains in place permanently, it isn't going to be a permanent solution to the economic problem. As soon as the draft ends, the economic activity created by the draft will end. If you're adding back the public sector jobs that were lost in the recession, those jobs will tend to remain once the stimulus is ended because the economic activity will have returned to the pre-recession levels that maintained them in the first place.

 

So why don't we just give people money to spend?

 

If the economy returns, what if it does not? How long do you keep the stimulus going waiting for the economy to return? 2 years? 10 years? 20 years? as long as we have need?

Only until the economy returns I guess.

 

Because what is needed is sustained stimulus, not a one time stimulus. In order for the state/local government stimulus to work, it has to be maintained until the economy returns. Ceezmad does hit upon a good point though. The only way the stimulus ends is if the economy does return. However, that would mean the economy will never improve above what it is currently at regardless of the what attempts are made to help it.

 

Yeah, but it's a lousy investment. Instead of roads, schools, etc. you just get a bunch of bomb craters - and not even in the US!

 

Although, it doesn't necessarily have to be military service. If the forced conscription were for "national service" instead of specifically "military service" that could result in improved roads, schools, etc.

 

Let’s bomb bridges in the USA, boom double stimulus.