Robert Reich wrote an excellent article that sums up what everyone should know about the current economy. As he says, this isn’t rocket science.
The only way out of the vicious economic cycle is for government to adopt an expansionary fiscal policy—spending more in the short term in order to make up for the shortfall in consumer demand. This would create jobs, which will put money in peoples’ pockets, which they’d then spend, thereby persuading employers to do more hiring. The consequential job growth will also help reduce the long-term ratio of debt to GDP. It’s a win-win.
It is frustrating to watch as those in power repeat all of the mistakes of the Great Depression. I used to think that we would never have another because of what was learned; the Great Depression was kind of like Christianity: my grandparents suffered so that I would not have to. How naive I was.
