The Jobless Trap

http://www.nytimes.com/2013/04/22/opinion/krugman-the-jobless-trap.html?src=ISMR_AP_LO_MST_FB

***************

"Most people evaluate events in their lives according to how they will be personally affected. Leaders think within a broader context."  (John C. Maxwell)

***************

Krugman is still on his "DEBT" perspective. He sees what we've done to respond to the worldwide financial crisis as "...a monstrously failed response to economic depression." He calls it "debt hysteria" and defines it as "fear that unless we slash spending we'll turn into Greece any day now."

But, about the real danger, he is 100% correct: "the corrosive effect, social and economic, of persistent high unemployment. And, even as the case for debt hysteria is collapsing, our worst fears about the damage from long-term unemployment are being confirmed."

He adds: "Five years after the crisis, unemployment remains elevated, with almost 12 million Americans out of work ... with 4.6 million unemployed for more than 6 months." And, the sad news here is that potential employers assume that something must be wrong with people who can't find a job, even if the real reason is simply "the terrible economy."

According to studies, a rising number of job openings does nothing to reduce the numbers of the long-term unemployed. According to Krugman, we are creating a permanent class of jobless Americans.

Krugman: "Our exaggerated fear of debt is, in short, creating a slow-motion catastrophe." And we continue to make it worse by spending less and creating more unemployment. Oh, and let's not spend government money on badly needed road repair and other important infrastructure projects that would fix things that need to be fixed and create employment (on a 1/1.5 dollar spend ratio).

Krugman is right.