The American Economic Mess in a Nutshell

Robert Reich sums up the problem facing the US:

Since this Depression began at the end of 2007, America’s potential labor force – working-age people who want jobs – has grown by over 7 million. But since then the number of Americans with jobs has shrunk by more than 300,000.

If this doesn’t prompt President Obama to unveil a bold jobs plan next Thursday, I don’t know what will.

The problem is on the demand side. Consumers (whose spending is 70 percent of the economy) can’t boost the economy on their own. They’re still too burdened by debt, especially on homes that are worth less than their mortgages. Their jobs are disappearinig, their pay is dropping, their medical bills are soaring.

And businesses won’t hire without more sales.

So we’re in a vicous cycle.

Nearly 3 years have been wasted without taking the fact that the US is in a serious depression. Obama is fiddling while Rome burns. The Republicans are spitting in the eye of America with their fantasy story that more Bush tax cuts and deregulation will raise the economy from the dead. The George Bush years were the worst for job creation since WWII. Even Jimmy Carter in 4 years created more jobs during the 1970s stagflation that George Bush did in 8 years of his "deregulate, deregulate, deregulate" and "shrink the government".

I wish Obama would listen to Robert Reich:

So why don’t Republicans get it? Either they’re knaves – they want the economy to stay awful through next Election Day so Obama gets the boot. Or they’re fools – they’ve bought the lie that reducing the deficit now creates more jobs.

Every time you hear anyone say we’re “broke” or “can’t afford to spend more,” tell them we’ll be in worse shape if we don’t. If the economy remains dead in the water, the ratio of public debt to GDP balloons.

And remind them that the federal government can now borrow at fire-sale rates. Interest on the ten-year Treasury bill is 2 percent.

Do you hear me, Mr. President? Please — be bold next week. And if, as expected, Republicans refuse to go along, take it to the people. Mobilize the public. Use the bully pulpit. That’s what you have it for.