I commented on what Krugman advocates a couple of weeks ago, agreeing that
governments must continue to 'spend, spend, spend' but questioning what they
may be spending it on. In Canada, a primary focus of stimulative spending has
been on "shovel-ready" jobs. Via Canada's Economic Action Plan, roads are
widened, swimming pools and sidewalks are built, and community buildings are
repaired. While the plan is useful in providing some work in communities, I
question whether the Action Plan will result in the kind of change needed to
help people move into a future of permanent employment. More long-lasting
places need to be provided in the economy and people need to be trained to move
into them if ever a permanent solution is to be found.
In that posting, I also pointed out that the real unemployment rate, which
includes people that have dropped out of the labour market as well as those who
are actively seeking work, is far higher, perhaps twice as high as the official
rate. One has to wonder what these "inactive" people are doing. Perhaps some
of them are working, though not working as work is officially defined. For
example, in large cities some of them could be selling drugs or doing
petty-crime stuff that provides them with a living. Others would
'unofficially' mow lawns, shovel snow, paint houses or do whatever else would
earn them some money. I suppose that some of the money government spends on
"shovel ready" jobs would filter over to the dropouts doing these kinds of
things, but because they don't report on what they do, one can't know how much.
Ed
----- Original Message -----
From: "Michael Gurstein" <[email protected]>
To: "'RE-DESIGNING WORK, INCOME DISTRIBUTION,EDUCATION'"
<[email protected]>
Sent: Sunday, July 04, 2010 6:42 AM
Subject: [Futurework] Krugman: Myths of Austerity
>
> Krugman: Myths of Austerity
>
> Paul Krugman: Somehow it has become conventional wisdom that now is the time
> to slash spending, despite the fact that the world's major economies remain
> deeply depressed. And current examples of austerity are anything but
> encouraging. So the next time you hear serious-sounding people explaining
> the need for fiscal austerity, try to parse their argument. Almost surely,
> you'll discover that what sounds like hardheaded realism actually rests on a
> foundation of fantasy, on the belief that invisible vigilantes will punish
> us if we're bad and the confidence fairy will reward us if we're good. And
> real-world policy -- policy that will blight the lives of millions of
> working families -- is being built on that foundation.
>
>
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