A Preview of Thursday’s Jobs Speech: He’s Got Nothin’


Three months ago, when the May employment report revealed that the economy added just 54,000 jobs, President Obama urged the American people “not to panic.” (I urged the opposite here.)  Now the August report is in, and oh what we wouldn’t give for 54,000 new jobs. The Republicans blame it all on uncertainty — employers are worried about the threat of new regulations and higher taxes, so they won’t risk parting with their mountains of (record-high corporate) profits (Mike Norman debunks the Republican argument here.). Obama essentially agrees with the Republicans.

First he blamed the doomsdayers for pointing out that the recovery was faltering, saying that their dismal warnings only hamper confidence, causing people to spend less and save more. Then he blamed lackluster job growth on the uncertainty that was created during the standoff over raising the nation’s debt-ceiling limit. Striking a deal to cut trillions in future demand (oops – I mean nasty deficits) was supposed to restore confidence among sellers. Like the Republicans, President Obama (is it really necessary to distinguish the two any longer?) also believes that red tape and regulation are major deterrents to the recovery and that ratifying some free trade deals and overhauling our patent laws will provide a substantial boost to the economy. Unlike the Republicans, the president also wants to see more spending on infrastructure and an extension of the payroll tax cut (possibly to include employers this time), but there is nothing truly bold or imaginative in any of this — certainly nothing that is going to prevent a double-dip (if it hasn’t happened already), and nothing that’s going to create millions of jobs within any reasonable time frame.

So what will we hear on Thursday?  Look mostly for carrots with small price tags.  Probably a lot of talk about confidence, (un)certainty and incentives.  (Don’t make a drinking game out of it, or you’re liable to miss the second half of the speech.)   
Fortunately, there’s plenty of time to craft something different.  Here  — courtesy of Warren Mosler — is a great template.  It’s the speech Warren says he would deliver if he were president.  (Hey, there’s an idea.)
My fellow Americans, 
let me get right to the point.

I have three bold new proposals to get back all the jobs we lost, and then some.
In fact, we need at least 20 million new jobs to restore our lost prosperity and put America back on top.

First let me state that the reason private sector jobs are lost is always the same.
Jobs are lost when business sales go down.  
Economists give that fancy words- they call it a lack of aggregate demand.

But it’s very simple.  
A restaurant doesn’t lay anyone off when it’s full of paying customers, 
no matter how much the owner might hate the government, 
the paper work, and the health regulations.
  
A department store doesn’t lay off workers when it’s full of paying customers,
And an engineering firm doesn’t lay anyone off when it has a backlog of orders.

Restaurants and other businesses lay people off when their customers stop buying, for any reason. 
So the reason we lost 8 million jobs almost all at once back in 2008 wasn’t because all of a sudden 
all those people decided they’d rather collect unemployment than work.
The reason all those jobs were lost was because sales collapsed.  
Car sales, for example, collapsed from a rate of almost 17 million cars a year to just over 9 million cars a year.
That’s a serious collapse that cost millions of jobs.

Let me repeat, and it’s very simple, when sales go down, jobs are lost, 
and when sales go up, jobs go up, as business hires to service all their new customers.

So my three proposals are specifically designed to get sales up to make sure business has a good paying job for anyone 
willing and able to work.

That’s good for businesses and all the people who work for them.

And these proposals are bipartisan.  
They are supported by Americans ranging from Tea Party supporters to the Progressive left, and everyone in between.

So listen up!

My first proposal if for a full payroll tax suspension.
That means no FICA taxes will be taken from both employees and employers.

These taxes are punishing, regressive taxes that no progressive should ever support.
And, of course, the Tea Party is against any tax.  
So I expect full bipartisan support on this proposal.

Suspending these taxes adds hundreds of dollars a month to the incomes of people working for a living.
This is big money, not just a few pennies as in previous measures.

These are the people doing the real work.  
Allowing them to take home more of their pay supports their good efforts.
Right now take home pay is barely enough to pay for food, rent, and gasoline, with not much left over.
When government stops taking FICA taxes out of their pockets, 
they’ll be able to get back to more normal levels of spending.
And many will be able to better make their mortgage payments and their car payments,
which, by the way, is what the banks really want – people who can make their payments.
That’s the bottom up way to fix the banks, and not the top down bailouts we’ve done in the past.

And the payroll tax holiday is also for business, 
which reduces costs for business, 
which, through competition,
helps keep prices down for all of us, which means our dollars buy more than otherwise.

So a full payroll tax holiday means more take home pay for people working for a living,
and lower costs for business to help keep prices and inflation down,
so sales can go up and we can finally create those 20 million private sector jobs we desperately need.

My second proposal is for a one time $150 billion Federal revenue distribution to the 50 state governments 
with no strings attached.  
This will help the states to fill the financial hole created by the recession, 
and stay afloat while the sales and jobs recovery spurred by the payroll tax holiday
restores their lost revenues.

Again, I expect bipartisan support.  
The progressives will support this as it helps the states sustain essential services, 
and the Tea Party believes money is better spent at the state level than the federal level.  

My third proposal does not involve a lot of money, 
but it’s critical for the kind of recovery that fits our common vision of America   
My third proposal is for a federally funded $8/hr transition job 
for anyone willing and able to work, 
to help the transition from unemployment to private sector employment.
The problem is employers don’t like to hire the unemployed, 
and especially the long term unemployed.
While at the same time, 
with the payroll tax holiday and the revenue distribution to the states,
business is going to need to hire all the people it can get.
The federally funded transition job allows the unemployed to get a transition job,
and show that they are willing and able to go to work every day,
which makes them good candidates for graduation to private sector employment.

Again, I expect this proposal to also get solid bipartisan support.
Progressives have always known the value of full employment, 
while the Tea Party believes people should be able to work for a living, rather than collect unemployment.

Let me add here that nothing in these proposals expands the role or scope of the federal government.
The payroll tax holiday is a cut of a regressive, punishing tax, 
that takes the government’s hand out of the pockets of both workers and business.

The revenue distribution to the states has no strings attached.  
The federal government does nothing more than write a check.

And the transition job is designed to move the unemployed, who are in fact already in the public sector,
to private sector jobs.

There is no question that these three proposals will bring the increase in sales we need to 
usher in a new era of prosperity and full employment.

The remaining concern is the federal budget deficit.  

Fortunately, with the bad news of the downgrade of US Treasury securities by Standard and Poors to AA+ from AAA,
a very important lesson was learned.

Interest rates actually came down.  And substantially.

And with that the financial and economic heavy weights from the 4 corners of the globe 
made a very important point.

The markets are telling us something we should have known all along.
The US is not Greece for a very important reason that has been overlooked.
That reason is, the US federal government is the issuer of its own currency, the US dollar.
While Greece is not the issuer of the euro.

In fact, Greece, and all the other euro nations, have put themselves in the position of the US states.
Like the US states, Greece and other euro nations are not the issuer of the currency that they spend.
So they can run out of money and go broke, and are dependent on being able to tax and borrow to be able to spend.

But the issuer of its own currency, like the US, Japan, and the UK, 
can always pay their bills.
There is no such thing as the US running out of dollars.
The US is not dependent on taxes or borrowing to be able to make all of its dollar payments.
The US federal government can not go broke like Greece.

That was the important lesson of the S and P downgrade, 
and everyone has seen it up close and personal and they all now agree.
And now they all know why, with the deficit at record high levels, interest rates remain at record low levels.

Does that mean we should spend without limit and not tax at all?
Absolutely not!
Too much spending and not enough taxing will surely drive up prices and inflation.

But it does mean that right now, 
with unemployment sky high and an economy on the verge of another recession,
we can immediately enact my 3 proposals to bring us back to 
a strong economy with good jobs for people who want them. 

And some day, if somehow there are too many jobs and it’s causing an inflation problem,
we can then take the measures needed to cool things down.

But meanwhile, as they say, to get out of hole we need to stop digging,
and instead implement my 3 proposals.

So in conclusion, let me repeat these three, simple, direct, bipartisan proposals
for a speedy recovery: 

A full payroll tax holiday for employees and employers
A one time, per-capita, $150 billion revenue distribution to the states
And an $8/hr transition job for anyone willing and able to work to facilitate 
the transition from unemployment to private sector employment as the economy recovers.

Thank you.

31 responses to “A Preview of Thursday’s Jobs Speech: He’s Got Nothin’

  1. how does this compel rejection of the idea that "We don't have the money"?

  2. Actually, President Obama could stimulate the economy and produce a million jobs overnight with just two words, "I quit"

  3. I own two businesses and I assure you, even if business does pick up I will work with as few people as possible because I don't know what to expect with all the new regulations coming down the road. Everyone has suffered losses and the only way you make it back is cutting back on payroll. The fat days of having extra people are over for a long, long time.

  4. even if business does pick up I will work with as few people as possible because I don't know what to expect with all the new regulations coming down the road.The only policy signals you've gotten from the Obama administration and congressional Democrats are…continuation of the generous depreciation rules…continuation of payroll tax cuts (against Republican wishes)…the Small Business Jobs Act (a grand total of 3 Republicans in the House voted for it)…so yeah.Really, really scary, ruin-your-business stuff right there.

  5. A payroll tax holiday without an overhaul of our whole fisal policy and Social Security funding system would be irresponsible and regressive, not progressive. Given the present political environment, a payroll tax holiday would be made semi-permanent and then permanent, and that would eventually end up gutting Social Security itself, since Republicans and Obama-style Blue Dog Dems would gradually "cut" SS in order to "save" it until there was nothing left in the future to be "saved."Without providing a clear alternative method of guaranteeing funding for SS, this proposal fails since it doesn't distinguish between what is possible in the best of all worlds and what is actually possible in Washington now and in the near future. Unless Mosler provides a clear outline of how SS can be funded in the future without using payroll taxes, and how the SS Trust Fund needs to be managed under his plan, then his payroll tax holiday is not helpful. Just throwing out utopian proposals which would have harmful consequences within the present system is not an impressive way to persuade the general public that it ought to know more about MMT. I urge Warren Mosler to discuss the concrete transitional steps needed to ensure the future good health of SS without the payroll tax. We are talking about public policy, not theory.

  6. "Without providing a clear alternative method of guaranteeing funding for SS, this proposal fails…"I sounds to me like you are clinging to the incorrect notion that our government is funded through taxes. That isn't close to the way our fiat currency system works. Please take the time to read this primer about the way our economy really works since we went off of the gold standard: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1905625

  7. Good piece. But… uh! Don't link to Feldstein. That toad.

  8. Regarding Feldstein. He is completely inconsistent and evasive in that video clip. He says that there's a lack of aggregate demand and then claims that welfare programs need to be cut.The interviewer says that maybe people should be paying down debt rather than spending more money. What does Feldstein say? The government needs to reign in its debt. Does having a post a Harvard give license to be evasive and make non sequiters? If I were the interviewer I wouldn't have let him away with that one.The dude is a mummy. To the old economists home with him. He's irrelevant. And for Godsake… take him off NEP!!!

  9. There's a very clear way of funding SS without a payroll tax or trust fund. It's the same way we fund, say, national defense. Already the part of Medicare legally funded out of "general revenues" is noted by trustees to never be in danger of being "actuarially insolvent." Notice that the payroll tax cut hasn't cut into SS or trust funds at all since legally general revenues are making up the difference. It's all accounting gimmicks.I've still never heard someone on the left in favor of payroll taxes respond to this–if we pretended we financed, say, national defense out of a particular tax, do you think it would be easier or harder to cut defense spending if it was estimated that such a tax would be insufficient to cover defense expenditures in the future? Payroll taxes and trust funds are the only things permitting any discussion of cutting SS, not the other way around–it's the only reason people normally predisposed to favoring the program (like, say, Obama (!!)) might even contemplate cutting it. And it could NEVER be cut unless they allowed it, just as defense can never be significantly cut unless the GOP goes along to some degree. If headline "progressives" don't figure this out soon, they will end up cutting the most popular govt program of all time because the thing they thought protected it actually led to it's demise.

  10. "The only policy signals.."Really… a repeal of the Bush tax cuts…Obamacare……the payroll tax cuts are a joke and won't make any difference. Do you actually own a business Anonymous? How about a basic philosophy from this administration that you don't need to work to survive? What about the psychological aspect of having employees who would rather work fewer hours so they can qualify for government hand-outs? What about the threats of organized labor now that the NRLB has been stacked against business and is trying deperately to stretch it's nasty tenticles into all businesses? Soon entrepreneurs will simply realize that it is a whole lot easier to get a fat government job then spend countless hours working and making nothing. The more you make, the more the government takes or regulates away. Now we have government attempting to involve itself in mortgages? What's next? and you say that this has been a non-threatening administration. It is very obvious to me that you don't own a business.

  11. "The only policy signals you've gotten from the Obama administration and congressional Democrats are…continuation of the generous depreciation rules…continuation of payroll tax cuts (against Republican wishes)…the Small Business Jobs Act (a grand total of 3 Republicans in the House voted for it)…so yeah.Really, really scary, ruin-your-business stuff right there."So, I guess removing the Bush tax cuts, implementing Obamacare, stacking the NLRB with heavy union people and massive over-regulation isn't scary. This administration's push to increase welfare to the point where I have employees wanting to work less hours so they won't compromise their federal hand-out isn't scary. The fact that you can draw unemployment benefits for life, isn't scary. hmmmmmmm you must not own a business Anonymous.

  12. UI benefits for life? unless life expectancy has dropped to 99 weeks I think you may be incorrect there. You claim massive over-regulation but we have actually seen the removal of many more regulations than we have seen implemented. The bush tax cuts were intended to be temporary and has already been extended a great deal. and any heavy union person can tell you how much they wish the NLRB actually was stacked with pro-union people. Saying something does not make it so.

  13. Bobo,So, I guess removing the Bush tax cutsYou mean extending them? And cutting taxes further?implementing ObamacareThe price of health care soars with or without it. Are you upset because you're going to be paying a penalty when before you simply didn't provide health insurance?stacking the NLRB with heavy union peopleAre your employees unionized? Has the proportion of the work force that is unionized increased? Have we seen the proportion of income going toward labor increase relative to capital? Or have none of these things come to pass?massive over-regulation isn't scaryElaborate. Do you mean the air quality regulations that he decided not to implement?This administration's push to increase welfare to the point where I have employees wanting to work less hours so they won't compromise their federal hand-out isn't scaryWhich program?The fact that you can draw unemployment benefits for lifeAs the poster above said…http://en.wikipedia.org/wiki/99ers

  14. I agree 100% (Hay, there's an idea.) and I second it.

  15. How come Mosler doesn’t deal with the huge and rising wealth & income inequality in his speech? Such inequality certainly plays a major part in reducing aggregate demand. In addition, his $8 per hour proposal would seem to produce more problems than it solves. For example: The $8 per hour wage will pull down wages for all new hires.

  16. Look. We can fix this easy. A $100 an hour minimum wage for all. I can't figure out why if $8 an hour is good $100 an hour isn't much better? The trouble with Progressives is that they lack the courage of their convictions.

  17. Nice straw man, M. Simon. You're in the wrong place if you want someone to defend the argument you are critiquing.

  18. @anonymous:The $8 is a ballpark figure that sets the job guarantee wage at a low enough level so that it does not compete with the private sector. The job guarantee is intended to be an "employer of last resort" and should swell during a downturn, shrink during a recovery. The private sector will pull from the job guarantee pool by offering them wages above $8 / hr, plus any fringe. This is how both full employment and price stability are achieved.Now, speaking only for myself (although most bloggers here would agree I'm sure) inequality is a major problem in the US, and central to the crisis. There are ways to address the problem over time – through fiscal policy – but our most pressing issue of the day is unemployment. And to a degree, fixing that problem will make strides towards fixing our issue of inequality by allowing households to pay their bills and deleverage. ~Mitch Green

  19. I agree with Mitch. The $8 won't pull down wages because (a) it creates full employment aggregate demand, and we know that the only time real wages have risen is when that's happened, and (b) as Mitch says the pvt sector must pay at least that much. This also shows why M. Simon doesn't understand what he/she is critiquing–setting the job guarantee wage higher than the pvt sector employers can "afford" simply shifts the employment to the govt sector rather than raising standards of living (and they could be lower depending on what happens to productive capacity in that case). $8 may be too low for the longer run, but benefits/retirement could be added and the wage could be raised over time–again, the quicker you add those, the more disruptive and the more employment shifts to the govt sector and reduces pvt sector capacity.And there's no real way to deal with inequality if you don't first have full employment.

  20. 30 years of lies from the Republican and Democratic party, one party/two sides, on Government, Social Security, Medicare, and other economic Propaganda isn't overcome with facts, no matter how many times repeated.the lies are what got America into this mess and it will take the complete failure of our Country to expose the lies for what they are.and with the coming economic downturn on the rest of the idiot Americans who voted and believed St. Ronnie's lies, the destruction will be required to uproot all the lies the Republicans/Democrats have nursed.all the lies are too entrenched in the Media and Politics Americans grew up with since Nixon. the lies are too deep and undergird the America we see today.that idiots like Bobo and Simon repeat such tripe is proof of the lunacy and idiocy Obama represents and all the rest of the Political non thinking prevalent today.the stupidity is but a tool in the theft the Elites have used the middle Class with. the ignorance and fear has worked its' way to the inevitable destruction.we just have to wait and see when the last straw will cause the collapse.just a matter of time till then. with such idiots repeating the Government is Bad mantra, how or why would anyone believe otherwise.St. Ronnie did such a wonderful selling job scamming the Average Middle Class. and the Middle Class bought it, hook, line and sinker.sow the wind and reap the whirlwind… to quote a Christian line.

  21. All arguments are Moot. Peak oil flow is here folks. Economies depend on energy flow. Energy costs too much now compared to the 70s and the Morning in america Ronald Reagen years. Read the EIA and IEA reports. Pay attention to oil production rates and diminishing oil reserves. Everything is coming out of the ground a lot slower and not as much. The column and comments listed above address short term band aid delusions. It figures… Most are economists and most do not understand geology or any thing that requires an understanding of the real quantitative entity (petroleum) that runs this complex society. For further reading see Robert Hirsch energy report of 2005 and compare his predictions with what is going on right now. Energy is our manhattan project. Truly. Trouble is, there is nothing on the horizon that equals the energy density of oil and it the easy flowin stuff your daddy was drivin with. Hang onto your butts folks.

  22. You're right, Mark. We should all be studying oil and ignore everything else since nothing else is of any consequence. As if discussing something besides oil here suggests somehow that oil isn't important or even isn't as important as you think it is. Didn't see anyone say that here, Mark. Kind of like me going to a biochemistry site and telling everyone there that they should be studying macro and ignore everything else because it's bad macro that caused this financial meltdown. And all those people studying sustainable ag, or life saving drugs, or simply learning how to get along with people that are different–all that's irrelevant because the only thing that matters is oil. But let's go even further . . . we're all destined to die, so no reason to study anything, really. Anyone studying anything is just wasting their time, because we'll all be worm food in not too much time. Glad you set us all straight, Mark!

  23. STF, My livelyhood depends on discretionary spending. Everything you type on, drive with, eat your food from 3000 mile away in the winter, fly across the globe etc etc is dependent on petroleum man. Don t get me wrong. I indeed would just absolutely love to be proven wrong on this point because that means that society as a whole and my kids in particular would not face this dilemma of diminishing energy dense oil. I am glad you put this in the context of the inevitable because it doesnt necessarily have to end our complex life as we know it. I am not a doomer. However, when I read viald scientific reports on oil projection models etc (one particularly scary model was from geological scientists from Kuwait of all places (i.e. they aren't suppose to paint any dire pictures because the livelyhood of the country depends on their inflated oil reserve projections. There are many other reputable studies that I could pass on to you if you want. (this list is somewhat voluminous but I don't have the space right now. I would suggest that you do read the Hirsch report. It is sobering. Hirsch is a former energy department management type. If you don't want to read then listen http://www.energybulletin.net/stories/2010-09-16/exclusive-interview-robert-hirsch Cheers

  24. Mark,You missed my point. It's not that I disagree with you–I don't in any significant way, or at least I'm not enough of an expert in that area to disagree, and I will check out your links. My point is that this doesn't mean it's not important to understand the monetary system–the two are not mutually exclusive.

  25. STF, thanks for your thoughts regarding Social Security. If we financed defense with a special defense tax, this might be the only way the DOD budget would ever get significantly cut, because a special tax would almost guarantee defense spending would be cut in the long term. The same goes for SS. Exposing SS to the vagaries of general revenue would open the door to all sorts of deficit-hawk attacks and gradual cuts in the future. That's precisely why FDR buffered SS off from general revenues and created the SS tax in the first place. It's the only way to protect it from savage political attacks from politicians in both parties. At the moment Obama is energetically trying to cut SS by stealth means by playing with the cost of living increases, which looks neutral but would actually mean reductions for seniors of 10-30%. And more stealth reductions will surely come soon from Obama and other neoliberal Dems as well as from Repubs. Check out the "Third Way" web site, which is close to Obama and which explains why we have to cut SS in order to "save" it. Exposing SS to dependence on general revenues, as FDR knew, would be the beginning of the end for SS in a nation in which politics is so fundamentally irrational. MMT needs to come to terms with this stubborn fact and develop with a better way to unconditionally protect SS.

  26. Anonymous- your first paragraph above contradicts itself. You say a special defense tax would make DoD spending cuts probable. And that "the same goes for SS" – which is STF's argument. But then you say the special SS tax protects SS, rather than making it vulnerable.STF: I've still never heard someone on the left in favor of payroll taxes respond to this … they will end up cutting the most popular govt program of all time because the thing they thought protected it actually led to it's demise.Well, here is FDR on record, after hearing an "MMT" explanation of the economics of the taxation. Luther Gulick Memorandum re: Famous FDR Quote“I guess you’re right on the economics. They are politics all the way through. We put those pay roll contributions there so as to give the contributors a legal, moral, and political right to collect their pensions and their unemployment benefits. With those taxes in there, no damn politician can ever scrap my social security program. Those taxes aren’t a matter of economics, they’re straight politics.” FDR could not have known that 40 years later economics would move 4000 years backwards. And that the tax would thus be repressively hiked & used to create a giant mystical trust fund designed to destroy the SS program. FDR's judgment was probably politically accurate for his times. What is needed now is an equally canny & knowledgeable operator. The best political solution will not be FDR's, because we have a completely different situation: 30 years of gross, absurd overtaxation for SS with the hidden agenda of destroying an established program, not establishing a new idea. Anonymous: The only real ultimate protection for SS is getting everyone to understand what money is and how it works. SS can only depend on general revenue in the sense that all (government) spending does. The value of the SS dollars spent depend on all taxation. One thing might be to make SS spending depend in an ironclad way on the real per capita income available, to bring up the income of the elderly to some fixed percentile level. But the best political solution has to depend on understanding of the economics. Unfortunately, it is hard to think of politicians whose understanding either of economics or of political possibilities is comparable to FDR's.

  27. STF – True my difficulty arises from the feedback mechanisms (of course Monetary issues) that drive new exploration and develop new energy sources. One of the points that Hirsch predicted in 2005 is that there would be some substantial swings in oil price as we approach or enter the era of peak oil flow (limiting rates of oil extraction and large costs associated with this). These are being realized both in 2008-09 and with the current drop in prices). The breakeven costs for the new oil is pretty high considering that oil sands and oil shales are not mature oil (Tar sands are Bitumen and oil shale is keragens). We are entering the realm of an economic growth limitation that has a ceiling defined by high oil extraction costs. From a cost benefit analysis, energy analysts, petroleum engineers and geologists indicate that the energy recovered over energy invested ratio has dropped to 5 for the new stuff. (I read the oildrum.com and energybulletin.net ..most intelligent discussions) So it is a monetary issue. We have built our complex society on the premise that energy is cheap and will remain so. This is not physically or scientifically possible. Nothing approaches the energy density of oil (we could start building Nuclear power plants but as Hirsch indicates, this should have been done twenty years ago. Curiously, Carters energy dilemma seemed to disappear once mr Morning in America entered the scene.. What is not appreciated is that we had tremedous ramp up of previous oil reserves that were established in the Johnson, Ford and even Carter tenures. Canatrell (mexico) Prudhoe bay (started in 1967 – oil flows started 1977 with ramp up in the 80s, and North sea (relief of constraints from Europe) saved Ronny's butt. NOw this is not possible because there unfortunately is nothing truly on the horizon (Brazil doesnt hit until 2020 (have to drill through Molten Salt layers), and the arctic reserves (both National petroleum reserve and ANWR are literately busts. This gets back to the points that the article is making. While these are all short term fixes (some of which I agree with), the real problem we must address NOW has to be developing energy to replace our dwindling fast flow oil sources. Steve Chu knows about this but they have put the clamps on the energy department folks because they do not want to crash the markets. Economic growth will only be realised if we head in the energy development direction. Measures such as conservation, decreased energy use, (not highways cars etc) limit economic growth. It would make more sense to launch a Manhattan style project (those terms have been used by the President)_ of energy development and rail transport development to name a few. That is the monetary issue that I am concerned with. The short term fixes will sputter because they do not have the energy to be sustained. Like I said before, talk me off the cliff here… what will give us sustained long term economic growth. OUr current path will not accomplishe this. again… Cheers

  28. > And an engineering firm doesn't lay anyone off when it has a backlog of orders.Not true. The multinational IT company that I work for makes record profits, yet every year they let people go in NA and hire in China, India, and other low cost countries. How many of those 8 million jobs lost in the US in 2008 were earmarked to be cut regardless of how the economy fared? IMHO, the Great Recession gave companies cover to accellerate the offshoring that they were planning on doing anyway.

  29. Mark,FYI, there's a discussion over at Cullen's blog on peak oil http://pragcap.com/is-peak-oil-realI'd be interested in seeing your two cents thrown in there if you get the chance.

  30. Why not simply provide subsidies for the first year(s) employment? And go further to direct these subsidies at high value added, high skilled jobs? As a way to get all the dis- and mis- employed engineers, programmers, scientists and mathematicians out of retail, food and their houses?

  31. @ Mitch Greenso many people hate their jobs because they have been pushed to the edge. workplace stress causing problems at home and with health are undoubtedly on the rise. you/we could be very surprised by how many people quit their jobs to escape miserable conditions and decide to go to the ELR job.Many might even gladly take a pay cut. (with is unexplainable by most conventional economic theory). But it will happen, and what will employers respond with??? higher wages & later corresponding higher prices, a shift to capital away from labor, more off-shoring and outsourcing. The real story is that workers are tired of capitalism, quit trying to save it. The ELR while nice and theoretically sound is just medicine for a dying paradigm!