Thursday, July 01, 2010
This study, if accurate, is a PR nightmare for the current administration. The number of workers who have lost jobs or pay is more than half of the total workforce. No wonder there is a mutinous feeling among voters who want the recession to end after three years but see no turnaround in sight. The jobs issue is likely to be a challenge the administration cannot solve but it is the most important one. There is concern among some economists that cutting back on deficit spending will prolong the slump and make the recovery even longer. They have evidence for their views. The Depression didn't end until World War II started and put everyone back to work. The US doesn't have a similar situation today. There is a good chance that the economy will stumble forward like Japan's for a decade or more with millions of workers under-employed and businesses holding tightly to cash to see their way through. Pity the politicians who have to find solutions in that environment. Many of them won't remain in office long enough to effect a turnaround.