Our
greatest economic woe is that not many people around the world are buying our goods like they were before
2008. The reason is that there is large-scale unemployment in most places. This
coupled with a large amount of debt, carried by governments, pension funds, and
individuals, have left people and governments
searching for solutions.
For
individuals and families, financial austerity is the answer, but all too many
governments around the world are applying this same logic by cutting services
to their citizens. What does austerity accomplish in my country, the USA?
Cutting back on our massive defense spending would be a big help if we used the
money saved to keep our k12 school systems and public colleges adequately
funded. If, instead, we layoff teachers, increase class size, and raise tuition
at local colleges, it would be a crime if we do it in order to maintain our
massive defense spending.
Another solution offered is to reduce federal and local debt
by raising taxes on the wealthy. While some of the wealthy understand the need,
others say that they are the job creators and raising their taxes will kill
jobs. So far, I haven’t seen these job creators create jobs. President Obama
has tried several stimulus plans to get these job creators moving, but, with
one exception, no one will create jobs until they see customers. That exception
is the federal government.
Businesses will not create jobs until they see customers.
They won’t see enough customers until unemployment is reduced. This is a
problem without a solution unless the federal government steps in and creates
jobs. We all know that our infrastructure needs a makeover. Now, at a time when
our government can borrow at 1.6% on a 10 year loan, we should put aside our
debt fears and do a job that needs to be done. This will create jobs, then
customers, then the expansion of other businesses, and finally greater tax
revenue to pay off the debt.
This cure not new. After over a decade of limping along after
the great depression, prosperity returned when the government had to tool up
for WW2. I hope we can be smarter now by avoiding the war that some of our
politicians are aching for, and instead replace our ailing infrastructure with
new, innovative solutions. Some projects can be: installing fiber optic cables
in all cities, building a countrywide high-speed rail system, reworking our
electric grid, subsidizing green industries, etc. True some existing industries
will suffer, but just like the buggy-whip makers of old, they will have to find
ways to adapt to the changes or fade out of existence.
