Robert Reich Points a Way Out of the ‘Jobs Depression’
Posted on Oct 2, 2011
Government—the purchaser of last resort—must intervene to revive a sickly economy when consumers and businesses can’t do it on their own, says the award-winning political economist Robert Reich. President Barack Obama and the Congress could establish programs that put unemployed Americans to work rebuilding the country’s crumbling infrastructure, which would also put money in the pockets of people who buy the products that corporations produce.
But, Reich continues, congressional Republicans object, which means they either want to ride a ruined economy to election victory in 2012 or they’ve swallowed the lie that shrinking the deficit now creates jobs. And they won’t support Reich’s tax reform proposals: enlarging and expanding the wage subsidy for lower-income workers, reducing taxes on the middle class and adding a slew of new, higher-rated tax brackets for the wealthiest earners. —ARK
When consumers and businesses can’t boost the economy on their own, the responsibility must fall to the purchaser of last resort. As John Maynard Keynes informed us 75 years ago, that purchaser is the government.
Government can hire people directly to maintain the nation’s parks and playgrounds and to help in schools and hospitals. It can funnel money to help cash-starved states and local government so they don’t have to continue to slash payrolls and public services. And it can hire indirectly - contracting with companies to build schools, revamp public transportation and rebuild the nation’s crumbling highways, bridges and ports.
Not only does this create jobs but also puts money in the hands of all the people who get the jobs, so they can turn around and buy the goods and services they need - generating more jobs.
Flickr / zpeckler
Under the order of President Franklin Delano Roosevelt, during the Great Depression the Works Progress Administration employed millions of unskilled Americans in public works projects, building bridges, parks and schools, many of which survive to this day.