Only Jobs Will Get Our Economy Back on Track

Where do jobs come from?

At the same time, the Federal Reserve, like the President, Congress, the Treasury Secretary, and a slew of mainstream economists (most of whom completely missed the 2008 crisis) all disparage the one thing that could work – namely a large-scale jobs program. They all maintain the mistaken belief that the Fed’s focus should be reducing the deficit instead of unemployment. Trying to reduce the deficit will never work because in times of economic decline, what are called “automatic stabilizers” kick in to keep the economy from going into free fall -- things like unemployment benefits or food stamps. A government can’t make these kinds of payments without increasing its deficit in the short-term. And that’s as it should be, because what you’re trying to do is get some money into the hands of consumers, whose purchases begin to help the economy adjust itself. But this reality, which a Great Depression scholar should certainly know, has been obscured by several decades of fantasy economics promoted by conservatives. That this kind of thinking persists is perhaps the greatest obstacle we face in boosting the economy.