How Can We Goose The Recovery?

Apr 9 2012 @ 5:33pm

by Patrick Appel

Frum asks everyone to "recognize the magnitude of the social distress we still face." His economic proposal would be tough for either party to swallow:

To do better, we'll need a program to stimulate employment for the long-term unemployed — including potentially a New Deal-style requirement that nobody receive benefits without working. It's no good to anybody — the unemployed least of all — to allow the unemployed to collect two years' worth of benefits while waiting at home, their skills atrophying, their resumes going stale.

To do better, we may need to induce employers to create jobs, not only through tax cuts but through direct subsidies, including subsidies of the cost of health coverage. (Especially for older workers, health costs can be more of a deterrent to hiring even than the cost of wages.)

We will need to curtail the generosity of Medicare to open fiscal room for government programs to support opportunities for the young.

Also on the the economic distress front, Brad Plumer studies labour force dropouts:

About 35 percent of the people who have dropped out of the labor force since the recession began in 2007 do want a job, but they’ve become too discouraged to fire off resumes. That’s not good. The other 65 percent are people who have left the labor force and don’t want a job. Some of them are young and perhaps decided to go back to school. But the biggest chunk, by far, seems to be composed of Baby Boomers who have decided to retire early.