Got caught up a little this weekend, so I'm double posting both today and tomorrow to make up for it. Sorry to inconvenience anyone.
http://money.cnn.com/2011/03/03/news/economy/federal_budget_dean_baker/index.htm
The article is kind of a long read, but the main point the article seems to make is that both Obama and Republican leadership don't have consumers' best interest at heart. The articles blames a lack of demand, coupled with 25 million unemployed, underemployed, or discouraged workers for the state of the economy. The housing bubble drove the markit until 2007, and since then the dropoff in consumption in consumption has led to a 1.2 trillion (10%) drop. Businesses won't hire because government cuts spending- we need more spending to create jobs.
Do you agree or disagree with the article's p.o.v.?
I believe that the author has the intent behind spending cuts wrong. There is so much job creating, small business stimulating rhetoric out there is easy to get confused. Spending cuts are occurring because there are great gaping budget deficits and we cannot afford our present form of government. Yes, jobs do stimulate the economy and so does spending, however there is little growth and no money for such spending to begin with. How can we legitimize a government that cannot even pay its own bills?
ReplyDeleteI think Ashley makes a good point. Businesses can't rely on the government to increase spending when there is no money to be spent. I also struggle with understanding the concept of the government being entirely responsible for creating jobs. The quote below is from Dan Mitchell, a senior fellow at the Cato Institute and co-author of Global Tax Revolution: The Rise of Tax Competition and the Battle to Defend It.
ReplyDelete"Unfortunately, no matter how the issue is analyzed, there is virtually no support for the notion that government spending creates jobs. Indeed, the more relevant consideration is the degree to which bigger government destroys jobs."
I think he put forth a good argument for this in the article I read. If you want to read more on Mitchell's point of view, the link is
http://www.cato.org/pub_display.php?pub_id=9825
Our speaker last Thursday mentioned that government is not responsible for creating jobs it is the economy. We need to invest in long term growth and cut spending on things we dont need and investt
ReplyDeleteI'm thinking it was the city manager who said this in class but I could have heard/read it somewhere else as well and it goes along with the quote of Dan Mitchell: the government does not create jobs. Governments can however set the ground for job creation (tax cuts, subsidies etc provide incentive for businesses to start and/or expand etc).
ReplyDeleteHowever, I got to agree with Ashley. Moving forward from the debate about whether the govt does create jobs or not, the government simply does not have the money for such spending no matter how many people are unemployed or discouraged from searching for jobs.
Just read the Cato institute article. Good find!
ReplyDeleteGovernments can't, and I believe never should be solely responsible for job creation. And although we may not see it in the press, there is quite a bit of job creation out there, we just don't hear it. Instead we hear about all the spending cuts. Clearly growth now is limited, but I think Laura makes a good point... we need to invest in long term growth, like education, and cut spending costs, for example military expenses.
ReplyDeleteI think we have become spoiled and now expect government to bail us out whenever we get into trouble. We expect government to do things for us that people used to be able to do themselves, to the point that we cant do them ourselves anymore.
ReplyDelete