What would happen if the federal government sent unemployed college grads into the classroom to beef up reading, math and science instruction in elementary, middle and high schools?
What would happen if the federal government helped pay for the construction of new reservoirs or the expansion of existing ones?
What would happen if the federal government boosted worthy transportation projects — roads, bridges, rail and ports?
And what would happen if the federal government spent real money — not relative chump change — investing in solar, wind, geothermal and other forms of renewable energy?
We’d have more jobs and fewer foreclosures, that’s what. We’d also have a better quality of life and a more competitive position in the global economy.
I’m not a complete moron. I know that’s not going to happen. And I know the government has been living beyond its means for decades. More than $14 trillion in debt needs to be cut sharply to prevent robbing our kids and grandkids.
But like many things in life, the question is when? My answer is not now. Coming up with a long-term game plan is fine. But immediately making deep cuts to a fragile economy will do more harm than good.
That’s probably a minority view. And most of the CEOs I’ve interviewed for this column probably disagree with it. But, in my view, too many people have been suffering for too long in this alleged “recovery,” which began more than two years ago. They do not suffer alone. Their situation drags down the entire economy and the future of the very kids we say we want to protect.
Many moons ago, I learned a few important lessons in my economics classes:
– It took World War II to get us out of the Great Depression. It wasn’t because lots of soldiers were killed. It was because the government spent money. Lots.
– FDR understood what Herbert Hoover did not. The government needs to act differently than a family does in a crisis. The family pulls in its financial horns, as it should. The government needs to do the opposite — spend when times are tough and reap the rewards when times are good. Why?
– GDP = C + I + G. Our economy is made up of demand from three sources — consumers, business investment and government. When two of them retrench, as they have, the government needs to act boldly or the pain will last for a long time — especially after a financial meltdown.
Over the past few years, I’ve heard and read the following many times: “The government doesn’t create jobs.”
Nonsense. If the government doesn’t create jobs, then who are the soldiers in Iraq and Afghanistan working for? If the government doesn’t create jobs, who’s funding the Lockheed Martin aerospace plant here? And if the government doesn’t create jobs, why did the unemployment rate rise in June after it cut thousands?
The economy has been sick since December 2007 and it will continue to be sick for several more years.
This country can do better. We can invest in our people, grow the economy and use the revenue to cut the debt over time. Or we can continue to waste our resources by leaving millions of talented people on the unemployment line.
- Henry Unger, The Biz Beat
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