America's Job Problem (presented by NPR)

wordsmythe wrote:

Actually, the self-refutation of broken window theory seems to imply that the government does the most good by running a deficit. That way nobody gets laid off and the government doesn't have to hike taxes to pay for state employees.

Win-win. ;)

You're being facetious...I think? It's so hard to tell with text. Or you're forgetting the variable "t" for Time, which (as Hazlitt described well) makes deficit spending come back and bite us in the ass big time. Especially this incomprehensably insane level of deficit spending.

As an aside, they don't show this one on television anymore. I thought it was funny.

15. That appropriation by Congress for river and Harbor improvements of a National character, required for the accommodation and security of an existing commerce, are authorized by the constitution and justified by the obligation of Government to protect the lives and property of its citizens.

16. That a railroad to the Pacific ocean is imperatively demanded by the interests of the whole country; that the Federal Government ought to render immediate and efficient aid in its construction; and that, as preliminary thereto, a daily overland mail should be promptly established.

Republican Party platform - 1860.

Minarchist wrote:
wordsmythe wrote:

Actually, the self-refutation of broken window theory seems to imply that the government does the most good by running a deficit. That way nobody gets laid off and the government doesn't have to hike taxes to pay for state employees.

Win-win. ;)

You're being facetious...I think? It's so hard to tell with text. Or you're forgetting the variable "t" for Time, which (as Hazlitt described well) makes deficit spending come back and bite us in the ass big time. Especially this incomprehensably insane level of deficit spending.

As an aside, they don't show this one on television anymore. I thought it was funny.

Hazlitt has been shown to be wrong. When is this time bomb supposed to explode? It was not the deficit that killed jobs but rather debt-deflation.

Sept 26, 1940, New York Times: Deficit Financing is Hit by Hanes: ” . . . unless an end is put to deficit financing, to profligate spending and to indifference as to the nature and extent of governmental borrowing, the nation will surely take the road to dictatorship, Robert M. Hanes, president of the American Bankers Association asserted today. He said, “insolvency is the time-bomb which can eventually destroy the American system . . . the Federal debt . . . threatens the solvency of the entire economy.”

Feb 11, 1960, New York Times: Mueller Assails Rise in Spending: The enormous cost of various Federal programs is a time bomb, threatening the country’s fiscal future, Secretary of Commerce, Frederick H. Mueller warned here today “. . . the accrued liability is a ticking time bomb. Some day someone will have to pay.”

Oct 4, 1983 Evening Independent – The United States and the developed world face a “ticking time bomb” because of the huge foreign debt involving loans to Third World nations

Oct 26, 1983, David Ibata: “ . . . home-building officials called for a commission to propose ways to trim the $200 billion federal deficit. The deficit is a ‘ticking time bomb‘ that probably will explode in the third quarter of 1984,’ said Fred Napolitano, former president of the National Association of Home Builders.

Feb 21, 1984, James Warren: “‘We now hear from them (the Reagan administration) that deficits don’t cause high interest rates and inflation,’ AFL-CIO President Lane Kirkland said. ‘If that’s the case, we’ve suddenly discovered the horn of plenty and should stop worrying and keep borrowing and spending. But I don’t believe it. It’s a time bomb ticking away.”

January 12, 1985, Lexington Herald-Leader (KY):The federal deficit is “a ticking time bomb, and it’s about to blow up,” U.S. Sen. Mitch McConnell, a Louisville Republican, said yesterday.

Feb 17, 1985, Los Angeles Times: We labeled the deficit a `ticking time bomb‘ that threatens to permanently undermine the strength and vitality of the American economy.”

Jan 5, 1987, Richmond Times – Dispatch – Richmond, VA: 100TH CONGRESS FACING U.S. DEFICIT ‘TIME BOMB‘

November 28, 1987, The Dallas Morning News: THE TICKING TIME BOMB OF LONG-TERM HEALTH CARE COSTS A fiscal time bomb is slowly ticking that, if not defused, could explode into a financial crisis within the next few years for the federal government and our nation’s elderly. The ticking bomb is the growing cost of long-term care.

October 23, 1989, FORTUNE Magazine: A TIME BOMB FOR U.S. TAXPAYERS The government guarantees millions of mortgages, bonds, deposits, and student loans. These liabilities, now twice the national debt, are growing fast.

http://rodgermmitchell.wordpress.com...

C'mon, goman, we've gone over this plenty of times before. I know you're not ever going to change your tune, so let's just agree to not spam the unemployment thread with yet another deficit debate.

Minarchist wrote:

C'mon, goman, we've gone over this plenty of times before. I know you're not ever going to change your tune, so let's just agree to not spam the unemployment thread with yet another deficit debate.

The word deficit is in the OP. It was not brought up by me. It is also part and parcel to unemployment solutions. But only from the Federal Government since state and local governments cannot deficit spend.

If you cannot understand monetary sovereignty you cannot understand the solution.

NPR is focusing on the microeconomics problems of unemployment. This is not the reason for the spike of unemployment. The reason for unemployment is lack of demand. How to create more demand?

Well the Republicans of 1860 had two ways as posted above.

jdzappa mentioned what can be done now with the "Green Economy." The only way to do that is to deficit spend. Hence why I focus on why it is not a problem or will ever be a problem. It is the only solution.

Minarchist wrote:

Back to the OP, I was thinking about it a bit last night, and I think a large part of the problem is that the government for some bizarre reason tends to think of jobs as an end to themselves, rather than a means to some other ends. Which is better: 100% employment where everyone is a ditch-digger who are dirt poor, and the quality of life is miserable — or a Wall-E level of technology where no one has a job because everything has been automated (including gathering and production of food)? Employment isn't a "goal" in the sense that it's what we should be striving for, and any incentives created with that mindset will necessarily pervert the market. Lower unemployment is certainly a desirable thing in our current society; I'm not debating that. I just think it's a classic case of treating the symptoms, not the disease, and that can make things worse.

That's one of the smartest things I've read in P&C in months.

Duoae wrote:

F*cking ridiculous. It'd be a laughable situation if there wasn't all this money going to waste. Even conscientious objectors during the war were put to better use than the unemployed today. I just don't get it. Why give people money for nothing if they can and will do/learn something for that money?

I was unemployed for a year ending last November. I went to the unemployment agency in my state and asked for a *loan* to start a business. I was involved in a startup and felt like if I had the ability to work full time I could have gotten the startup off the ground in roughly 6 months. Keep in mind that I was asking for a loan on my own unemployment. What the state does is they pay you your usual unemployment, but waive the requirements for the job hunt so you can create your business. I didn't qualify because they felt I would be able to find a job shortly.

So I spent the next year working on the startup AND looking for work full time. It took a year to find the job and because I was tied up in interviews (there was no shortage of interviews, just not enough people actually closing the deal and hiring) and other activities it was impossible to get the startup off the ground. So basically they paid me to do nothing when I was happy to borrow my own unemployment so I could start a business.

Seth wrote:
Minarchist wrote:

Back to the OP, I was thinking about it a bit last night, and I think a large part of the problem is that the government for some bizarre reason tends to think of jobs as an end to themselves, rather than a means to some other ends. Which is better: 100% employment where everyone is a ditch-digger who are dirt poor, and the quality of life is miserable — or a Wall-E level of technology where no one has a job because everything has been automated (including gathering and production of food)? Employment isn't a "goal" in the sense that it's what we should be striving for, and any incentives created with that mindset will necessarily pervert the market. Lower unemployment is certainly a desirable thing in our current society; I'm not debating that. I just think it's a classic case of treating the symptoms, not the disease, and that can make things worse.

That's one of the smartest things I've read in P&C in months.

He is correct in a sense. However, jobs = income for the wage earner and productivity for the employer. Hence why it is so important.

So again how do we get people income if not through jobs if productivity is being done by machines?

Job sharing? Reducing hours?

It has been done in the past when we went to a standard 8 hour day/40 hour workweek.

BTW - My point is that local and state governments cannot deficit spend.

Boy, you should tell California that. They'll be so happy to know they didn't actually borrow and spend all those billions.

Deficit spending is borrowing money to spend this year, at the cost of interest and principal payments in the future. Any entity can do that, but when most do, it's just called 'borrowing'.

Like most debt, government borrowing can be used for productive or unproductive ends. Unlike most debt, it doesn't go away when the people who borrowed it die. It's a unique fiscal instrument, in that it can put other people in debt, even those who weren't born when the loan was taken out. So it needs to be treated very, very carefully, like the radioactive danger it is. It's grossly unethical to put other people, and even later generations, in debt for short-term benefits that they won't even see. And default has terrible consequences, so it's not like they can easily escape it.

Ergo, you'd think we'd be super, super careful about issuing the stuff, but we haven't been. We've really put our children and grandchildren in a bind. And now we're not even willing to invest the money to get them up to speed so that they have the earning power to pay for our flagrant consumption.

We have a debt problem, at nearly all levels of society; it's gotten so bad that it's strangling us. You can see it happening here in an unusually clear way, but it's been going on for a long, long time. A percent or two a year gets dramatic, if you accumulate the damage for a sufficient number of years.

Seth wrote:
Minarchist wrote:

Back to the OP, I was thinking about it a bit last night, and I think a large part of the problem is that the government for some bizarre reason tends to think of jobs as an end to themselves, rather than a means to some other ends. Which is better: 100% employment where everyone is a ditch-digger who are dirt poor, and the quality of life is miserable — or a Wall-E level of technology where no one has a job because everything has been automated (including gathering and production of food)? Employment isn't a "goal" in the sense that it's what we should be striving for, and any incentives created with that mindset will necessarily pervert the market. Lower unemployment is certainly a desirable thing in our current society; I'm not debating that. I just think it's a classic case of treating the symptoms, not the disease, and that can make things worse.

That's one of the smartest things I've read in P&C in months.

When you're starving, you're not exactly picky about what you eat.

There are tens of millions of unemployed Americans. Since companies haven't stopped charging for their goods and services, since banks still want their mortgage payments, etc. having a job that generates income *is* the goal for a lot of people. Yes, we can argue about the quality of the job, but the reality is that lots of people need to put a roof over their heads and feed their families and in order to do that they need a job.

This is why there is such a large disconnect between Main Street and Wall Street these days. According to Wall Street, the economy is doing fantastic. Corporate profits are at record levels. The Dow Jones Industrial Average is almost as high as it was during the boom. Worker productivity is through the roof.

On Main Street, things are very different. Millions are unemployed. Millions more have lost their homes. Unlike what the government says, people know inflation is a very real thing since government stats conveniently overlook the two things consuming a larger and larger chunk of their paychecks: food and gas. Even if you have a job your real wages likely haven't grown more than inflation since the 70s. And you're expected to work harder and longer to make up for all the workers your company fired.

The "disease" as you put it is global in nature. Emerging economies are exerting tremendous pressure to lower wages for unskilled or moderately skilled labor. Even the accepted corporate response to this--keep the high skilled engineering and design jobs local and outsource the manufacturing to low cost countries--will fall apart in a decade or two as countries like China and India graduate millions of engineers and scientists.

To put it another way, what's good for GM (or any other corporation) is no longer good for America. Corporations don't care about the quality of jobs they create or whether the jobs are here or in another country. Given their global operations they don't even have to worry about decreased consumption here in the States because of unemployment hurting their bottom lines. When the economies of China, India, and Brazil are smoking hot who gives a crap that 20 million Americans or so aren't buying any more?

Malor - Have you ever invested in State or Local government bonds? They are specifically for capital projects.

PS - California deficit falls to $9.6 billion.

http://www.sfgate.com/cgi-bin/articl...

SallyNasty wrote:
wordsmythe wrote:

That's always something that worries me a little when I'm also thinking about how inefficient things like the federal bureaucracy are. Streamlining those inefficiencies ultimately means laying people off. I know some people don't have this problem, but that always makes me pause a little.

You are not the only one.

Speaking on the whole government worker issue, it's also easy to forget about government funded organizations, like, say, NASA, the NSF and the NIH.

I work for a grant funded by the NIH and we are still waiting for the dam reps and senators to get their asses together and pass a budget so we'll know if we have jobs still at the end of the year.

OG_slinger wrote:

Even the accepted corporate response to this--keep the high skilled engineering and design jobs local and outsource the manufacturing to low cost countries--will fall apart in a decade or two as countries like China and India graduate millions of engineers and scientists.

It's already falling apart. IT has been taking hits for years. Engineering and accounting jobs are already being shipped off to other countries. Even with a college degree you are facing a lot more competition for jobs that do not require a person be in a specific location.

Whose making the Wall-E level technology stuff? Wall-E? Sooner or later, he's going to want workers rights.

Will Obama do the right thing and bury the hatchet (Debt Fear) once and for all. He has the constitution on his side.

If not him, then it is up to the citizens that will pay for the Questioning of the Debt.

The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.

The debt ceiling is unconstitutional. Ron Paul and his minions thinks this provision is just for debts incurred around 1868. I wonder if they think 1st and 2nd amendment is just for 1791.

in other words, Malor's points are unconstitutional.

If you want to know more of what I am talking about go here.

http://prospect.org/cs/articles?arti...

fangblackbone wrote:

They are the community colleges and they are being gutted right now. So much so that there are alarmist articles already predicting their death by 2015.

The community college system is as good as dead. There's too much money to be made in the "private" for-profit section (I use private in quotes because it's entirely funded by the taxpayer -- those student loans that will be defaulted on because the degrees from the University of Phoenix aren't worth the bandwidth they're piped through). And unfortunately, you can only expect these entities to get more powerful. Money = lobbyists, and there are building a legion of 'em to protect their golden goose.

But the private sector always does it better than the government, right? ... Right?

The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.

Hah, now I'm unconstitional? Hah.

It's perfectly valid debt. We just can't pay it.

The purpose of that clause, goman, is to say that Congress has the ability to incur debt through force of law, and that nobody can gainsay them that right. Debt that Congress issues is valid debt, and woe unto you if you claim otherwise. Says so right there. This is to stop individuals and states from saying that THEY didn't authorize a given debt, and that it therefore shouldn't be paid.

The fact that the debt is real and valid and SHOULD be paid has no bearing on whether it actually WILL be paid, at least at par value. I'm sure every holder of government debt will receive exactly as many dollars as they've been promised, but I think they're likely to be quite unhappy with the amount of real purchasing power that's been returned to them.

Unconstitutional! You made my day.

nel e nel wrote:

Speaking on the whole government worker issue, it's also easy to forget about government funded organizations, like, say, NASA, the NSF and the NIH.

I work for a grant funded by the NIH and we are still waiting for the dam reps and senators to get their asses together and pass a budget so we'll know if we have jobs still at the end of the year.

And Malor says this.

It's grossly unethical to put other people, and even later generations, in debt for short-term benefits that they won't even see. And default has terrible consequences, so it's not like they can easily escape it.

It is unethical to suspend funding to NIH because of the "short-term benefits". Not only for jobs but also for the research done by NIH to help the health and well being of the people of the future.

This is the consequence of questioning the Debt. Unconstitutional BS.

"Unconstitutional"? Do you know what that means? Something you don't like that is harmful to the country isn't automatically unconstitutional. The Constitution is a legal document. THE legal document in the US. You need to have a little more precision when you use that argument.

DSGamer wrote:

"Unconstitutional"? Do you know what that means? Something you don't like that is harmful to the country isn't automatically unconstitutional. The Constitution is a legal document. THE legal document in the US. You need to have a little more precision when you use that argument.

Did you not read the link I posted. It is a more precise argument.

Real Americans Hate the Debt Ceiling

The Constitution prohibits fetters on the government's ability to make payments.

Yesterday, the United States reached its official debt limit, and Treasury Secretary Timothy Geithner resorted to what he calls extraordinary measures to keep the government functioning financially. Republicans demand spending cuts in exchange for raising the debt ceiling, but if the fight drags out the federal government could run out of money as soon as August. The government could default.

The problem is that it is unconstitutional to default because of the 14th amendment. IE the debt ceiling is unconstitutional.

Here - I'll post the Section 4 of 14th amendment again.

The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.

Planet Money had a couple of shows on the national debt and debt ceiling last week.

I'll buy Goman's point that the debt ceiling is, if not unconstitutional, then a horrible piece of contradictory legislation. The Congress controls the nation's purse strings. They create the budget, essentially approving every dollar that will be spent. The debt ceiling allows them to stop the Treasury from spending the money they already approved to be be spent if a magic number is reached.

First off, we're already way over the debt ceiling. That's what makes this whole argument hilarious to me. Simply by owning AIG and Fannie and Freddie I would say that technically the US has a mountain of debt that isn't officially counted against the national debt. AIG is an "insurer" to so much bad paper and has issued so many bad CDSs that I'm not even sure it's possible to count the potential debt impact of owning AIG. If AIG ever had to pay out on losses of counterparties the US debt would explode.

Secondly, The Fed has been taking on toxic assets as collateral for interest-free loans or low-interest loans since the bailout started. That's more uncounted debt really.

Finally, I don't read the 14th amendment the same way. In fact, I would say it's a fairly dubious amendment. There are a few of those. "Shall not be questioned" could be taken to mean you can't even speak out against it. I appreciate clarifying for me what you meant, though.

EDIT:

*Looks up* ^

I guess I'm a filthy skimmer. Sorry about that. I tend to skim debt discussions since they tend to come up in every thread on P & C, but that's no excuse for missing your earlier mention of the actual amendment, Gonman. Sorry about that.

The constitutionality of the debt ceiling would apply to existing debts (which is why it was passed after the civil war), but it doesn't seem to be a problem for prohibiting new debt.

DSGamer wrote:

EDIT:

*Looks up* ^

I guess I'm a filthy skimmer. Sorry about that. I tend to skim debt discussions since they tend to come up in every thread on P & C, but that's no excuse for missing your earlier mention of the actual amendment, Gonman. Sorry about that.

No worries. I am also a filthy skimmer too. Especially Malor. hehe

I hope you don't want me to leave?

Oreo_Speedwagon wrote:
fangblackbone wrote:

They are the community colleges and they are being gutted right now. So much so that there are alarmist articles already predicting their death by 2015.

The community college system is as good as dead. There's too much money to be made in the "private" for-profit section (I use private in quotes because it's entirely funded by the taxpayer -- those student loans that will be defaulted on because the degrees from the University of Phoenix aren't worth the bandwidth they're piped through). And unfortunately, you can only expect these entities to get more powerful. Money = lobbyists, and there are building a legion of 'em to protect their golden goose.

But the private sector always does it better than the government, right? ... Right?

The Conservative answer is that we shouldn't be subsidizing people's college education in the first place.

goman wrote:
nel e nel wrote:

Speaking on the whole government worker issue, it's also easy to forget about government funded organizations, like, say, NASA, the NSF and the NIH.

I work for a grant funded by the NIH and we are still waiting for the dam reps and senators to get their asses together and pass a budget so we'll know if we have jobs still at the end of the year.

And Malor says this.

It's grossly unethical to put other people, and even later generations, in debt for short-term benefits that they won't even see. And default has terrible consequences, so it's not like they can easily escape it.

It is unethical to suspend funding to NIH because of the "short-term benefits". Not only for jobs but also for the research done by NIH to help the health and well being of the people of the future.

I can't speak for Malor, but I didn't read his statement as a response to NASA, the NSF, and the NIH. I think those are some of the few long-term benefits things we invest in.

It's the ridiculous short-term benefits he (and I) are against. Things like building planes the Pentagon doesn't want so a factory in your state has planes to build for the next year.

I wouldn't so much mind all the debt spending if it was going towards NASA, science, or medical research. There's at least the possibility that money produces something worthwhile for our country and the world at large.

Funkenpants wrote:

The constitutionality of the debt ceiling would apply to existing debts (which is why it was passed after the civil war), but it doesn't seem to be a problem for prohibiting new debt.

If you cannot rollover the debt into new debt you cannot pay the existing debt, hence why prohibiting new debt is unconstitutional.

here is Republican platform of 1864 regarding Debt and currency.

10. Resolved, That the National faith, pledged for the redemption of the public debt, must be kept inviolate, and that for this purpose we recommend economy and rigid responsibility in the public expenditures, and a vigorous and just system of taxation; and that it is the duty of every loyal state to sustain the credit and promote the use of the National currency.

goman wrote:

If you cannot rollover the debt into new debt you cannot pay the existing debt, hence why prohibiting new debt is unconstitutional.

The 14th amendment and the 1930s Supreme Court opinion that interpreted it requires paying off the debt, but not how the debt is paid. You can raise taxes, sell off government buildings, rent out the army. Plenty of different ways to pay off a debt.

The 14th Amendment included that provision to prevent a post-civil war congress from reneging on war bonds and promises to pay union soldiers pensions. I don't see today's supreme court making an expansive reading of the 14th amendment to find a constitutional obligation to creditors to take on more debt to pay off existing creditors.

Also, I don't understand why you'd invoke the republican platform of 1864. It's not a law. It's not a legal opinion. It's a partisan tract written by politicians 147 years ago.

Funkenpants wrote:
goman wrote:

If you cannot rollover the debt into new debt you cannot pay the existing debt, hence why prohibiting new debt is unconstitutional.

The 1th amendment and the 1930s Supreme Court opinion that interpreted it requires paying off the debt, but not how the debt is paid. You can raise taxes, sell off government buildings, rent out the army. Plenty of different ways to pay off a debt.

The 14th Amendment included that provision to prevent a post-civil war congress from reneging on war bonds and promises to pay union soldiers pensions. I don't see today's supreme court making an expansive reading of the 14th amendment to find a constitutional obligation to creditors to take on more debt to pay off existing creditors.

Also, I don't understand why you'd invoke the republican platform of 1864. It's not a law. It's not a legal opinion. It's a partisan tract written by politicians 147 years ago.

It is a supporting fact that it was not just for reneging Union pensions but also for the reasons given in the Republican platform of 1864.

14th Amendment was part and parcel to Republican platform of the 1860s.

Questioning the debt with a debt ceiling is unconstitutional.

kaostheory wrote:

I can't speak for Malor, but I didn't read his statement as a response to NASA, the NSF, and the NIH. I think those are some of the few long-term benefits things we invest in.

It's the ridiculous short-term benefits he (and I) are against. Things like building planes the Pentagon doesn't want so a factory in your state has planes to build for the next year.

I wouldn't so much mind all the debt spending if it was going towards NASA, science, or medical research. There's at least the possibility that money produces something worthwhile for our country and the world at large.

But it is NIH & NPR being punished. The effect of the Debt Ceiling is that.

goman wrote:

But it is NIH & NPR being punished. The effect of the Debt Ceiling is that.

The effect of stupid legislators is that.