[quote="jjdrury81, post:1, topic:202405"]
Suddenly, creating jobs is out, inflicting pain is in. Condemning deficits and refusing to help a still-struggling economy has become the new fashion everywhere, including the United States, where 52 senators voted against extending aid to the unemployed despite the highest rate of long-term joblessness since the 1930s.
Many economists, myself included, regard this turn to austerity as a huge mistake. It raises memories of 1937, when F.D.R.’s premature attempt to balance the budget helped plunge a recovering economy back into severe recession. And here in Germany, a few scholars see parallels to the policies of Heinrich Brüning, the chancellor from 1930 to 1932, whose devotion to financial orthodoxy ended up sealing the doom of the Weimar Republic.
But despite these warnings, the deficit hawks are prevailing in most places — and nowhere more than here, where the government has pledged 80 billion euros, almost $100 billion, in tax increases and spending cuts even though the economy continues to operate far below capacity.
The underlying assumption of the above is that governmental action is what creates most jobs. It isn't so. Right now there are plenty of solvent businesses that will not hire, won't borrow, won't invest in new plant and equipment. And why? Because "cap and trade" which promises higher energy costs is still on the Democrat table, taxes are absolutely going to go up on small business people, nobody really knows what business healthcare costs are going to be other than more expensive, interest rates are absolutely going to go up.
The very best thing this administation could do for the economy right now is say "We're going to extend the Bush tax cuts to at least 2012, we're not going to do any more stimulus, we're not going to bail anybody out, we're putting the health insurance bill on hold until 2017, we're abandoning cap and trade, we're not going to impose anything that will cause energy costs to go up. And by the way, we're going to allow drilling anywhere at all so long as relief wells are put into every deep under water well from the start, and we're going to put new refineries and nuclear plants on a fast track for approval. One way or another, we're going to bring energy costs down."