Friday, December 07, 2012

Unemployment Falls to 7.7 Percent

The economy added 146,000 jobs last month and in a bit of a surprise the unemployment rate fell to 7.7 percent. This has more to do with people dropping out of the workforce than improvement in the economy.

I'd like to see a $50 billion to $100 billion infrastructure stimulus to improve roads, bridges, and schools. If we take the savings from the drawdown in Afghanistan, eliminate the 2 percent FICA holiday and allow the Bush tax cuts to the top 2 percent to finally expire, there will be more than enough money to pay for a new stimulus. Then we can have a burst of economic activity in the economy created by the spending and improve job creation numbers. The other benefit is that we will have infrastructure that is good for the next 20 to 50 years for our investment now. It is good for the short term and the long term.

2 Comments:

At 10:35 AM, Anonymous Dennis said...

"The economy added 146,000 jobs last month and in a bit of a surprise the unemployment rate fell to 7.7 percent. This has more to do with people dropping out of the workforce than improvement in the economy."

The 146,000 jobs added is a very poor number. I agree that this doesn't signal an improvement in the economy.

"I'd like to see a $50 billion to $100 billion infrastructure stimulus to improve roads, bridges, and schools."

This will have NO lasting impact on the economy. Once these projects are finished, what then? Keynesian economics are a failure because stimulus spending results in a temporary burst of activity as you said. All we have left after this initial burst is more debt.

Dennis

"A 1/32 Cherokee Tea Party guy having fun"

"We’re going to have that person arrested and prosecuted that did the video."-Hillary Clinton to murdered Navy Seal Tyrone Woods' father

 
At 2:30 PM, Blogger Rob said...

As the economy continues to improve more people will return to the workforce. If Republicans would stop creating uncertainty with their ridiculous financial games we might actually see the economy take off.

We got a major improvement after the first Stimulus was passed and are continuing to see slow improvement even as most of the world's national economies have stalled.

If we were to get additional spending as I argue, we would see signifincant short term job creation that would help build economic momentum once we hit critical mass.

We would have a lasting impact on the economy - we get infrastructure that lasts for 20-50 years (depending on the project). We need schools to educate kids, we need roads and bridges to move people and products. To think these have no impact on the economy is just wrong.

 

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