Blog for Boomers

Arguments abound that unemployment is a deep structural issue.  Paul Krugman suggests in a recent column this is the same argument used in the 1930′s to squash spending. What pulled us out of that long dreadful economic time was World War II and all the federal spending which ramped up production and employment.

Our biggest concern should be unemployment and getting people, especially young people back to work. Long term deficits are a serious issue, but one that will be resolved by putting  people back to work. Pay checks for everyone! Increased spending and yes, increased revenue for government deficits.

Ignore those who suggest we face structural unemployment issues and their cure is to starve the patient. The real threat to our economy is workers not working and being in that situation long term.

We can get back to having federal surpluses. This will happen when unemployment is at or below 5%. Employment at this level will bring in more tax dollars and we can seriously focus on spending cuts across the board with no programs excepted.

Unemployment is high and inflation is low. The U.S. should be rebuilding infrastructure NOW! Put away the immediate fear of increasing the federal deficit. Unemployment would be lower and workforce participation higher if we talked less and acted more to get infrastructure revitalization going now.

Labor and material costs will skyrocket when strong consistent economic growth occurs. If we continue to wring our hands and fret about long term deficits unemployment will remain high and economic growth will continue to be pathetically low in the 2-3% GDP range, if not worse.

California is a perfect example. Citizens are bemoaning the costs of much needed water development projects and high-speed rail. When worldwide economic growth pickups speed and the costs of concrete and steel skyrocket so will the total costs of projects that could already be underway. Lets build this nation to be the envy of the world. The fear mongrels will only lead us to mediocrity.

Robert Reich,  former secretary of labor stated in a tweet: “Rom says unemployment should be 4%. I was Secretary of Labor last time it was 4%. We got there by raising taxes on rich and investing in education and infrastructure”.

This blogger is not suggesting the rich pay for everything. I am suggesting action before costs go way up and action to bring unemployment down. Workforce participation will pay for projects and begin to lower deficits and get us back to the surplus days of the 1990′s. We can do it, but not by sitting on our hands.

Traders need to stop reacting so strongly to bad news. This mornings monthly jobs report was not good. Jobs created in April came in much lower than expected. Profits reported were flat also.

The stock market response was a swift decline across the DOW. These same traders will tell the average guy on the street not to read too much into one or two months worth of data.

Traders should follow their own advise and chill a little bit when one month of unfavorable data is sprinkled on top of many months of positive news.