Unofficially our unemployment rate is 12.5% the highest in recent record. And if we consider UNDERemployment rates we’re in even poorer shape. This is how Obama responds:
On the heels of more grim unemployment news, President-elect Barack Obama yesterday offered the first glimpse of what would be the largest public works program since President Dwight D. Eisenhower created the federal interstate system in the 1950s.
Obama said the massive government spending program he proposes to lift the country out of economic recession will include a renewed effort to make public buildings energy-efficient, rebuild the nation’s highways, renovate aging schools and install computers in classrooms, extend high-speed Internet to underserved areas and modernize hospitals by giving them access to electronic medical records.
“We need to act with the urgency this moment demands to save or create at least 2 1/2 million jobs so that the nearly 2 million Americans who’ve lost them know that they have a future,” Obama said in his weekly address, broadcast on the radio and the Internet.
There is a lot more to do. Obama hasn’t even touched the consumption crisis. But I’m reminded of the moment we had right after 9/11, where for the first time Bush had the support of a wide swath of Americans. And instead of using that moment to create a better world…Bush asked us to go shopping. Obama is not going to get it right. But this move is one that brings us closer.
Why do you feel Obama will not make the correct decision(s) on the economy?
He's surrounded by ideologues who subscribe to the magical thinking disease epidemic among all mainstream economists GROWTH.
There's none to be had, and this fundamental failure of analysis will undermine everything he seeks to do.
Here's what happens next.
Ridiculous.
US military spending as a percentage of US GDP was 4% in 2007, compared to over 40% during WW2. Currently, GDP is shrinking at a 0.5% annual rate. A 25% increase in defense spending (from 4% of GDP to 5% – not realistic) would but GDP growth back in the black without Orwellian garrison state nuke scenarios. Your comparisons are off by an order of magnitude, geopolitical fabrications notwithstanding.
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http://knol.google.com/k/alexander-emilfaro/gov…
The consumption crisis is largely a red herring. The overall tax burden in the US is substantially smaller than in other developed meaning that government spending composes a significantly smaller percentage of GDP than other developed nations. In fact, the annual deficits that the US runs indicate that the government spending ratios overstate the current tax burden on Americans.
Consumption is only ~50% of GDP in much of Europe because the other ~50% is government spending. Since the countries we're discussing all have comparable GDP per capita, we can see that the real difference is that the US economy is consumer-driven. And now that that part is faltering the solution to address the systemic weakness (The 70/30 split) is to increase government spending and balance the split. So, really, Obama is proposing the correct solution based on the criteria you've set forth. Most importantly, the type of spending Obama is proposing has huge long term benefits. Bombs are a one-time purchase. Infrastructure pays dividends.