If We Don’t Solve the Jobs Crisis We May End Up With Our Streets in Flames & Society Dysfunctional

from AlterNet

Bottom line: consumers have to have money in their pockets. If it doesn’t come from private sector growth, then it has to come through government spending. We often hear that businesses create jobs. But in reality, sales and demand are the main source of jobs. No matter how cheap labor is, firms will not employ if they do not have sales for the production. Restaurants won’t hire another employee if the tables sit empty. That is a fundamental reason why John Maynard Keynes and others opposed wage cutting as a way of stimulating employment.

Right now, we’re in a state of emergency. The country’s economic output is still below levels reached in 2007. We need 15 million more jobs just to replace what was lost in the last 3 years. Employment remains stagnant, but we are told to tighten our belts and stop “living beyond our means.” We are squeezed, and squeezed again. We hear talk about “unsustainable entitlement programs,” such as Social Security and Medicare as if these programs had something do to with the collapse in the US economy. They didn’t. The collapse occurred because the private credit bubble burst and households and firms began the long journey that will be necessary to restore the health of their balance sheets. It collapsed because the demand for goods and services was being driven by credit growth instead of real wages growth. That was always going to be an unsustainable growth path. Which can only mean one thing – there has to be more public spending – which should be targeted at maximizing the growth of decent and stable jobs.

The Rich 1% haven’t been creating jobs for decades, as Conservatives claim they do, they’ve simply been grabbing more & more for themselves, while simultaneously reducing the spending power of the 99%.  Now, there’s simply not enough luxury goods or lucrative investments to tempt the 1% into utilizing the vast sums they’ve hidden in Tax Havens, & the 99% don’t have enough disposable income to sustain the non-luxury sectors – result stagnation &, soon, recession.


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