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07/09/2012

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NEH

Terry, Glad too see a positive take on the problem. As for the views of WWII vets, most of these guys are either dead or in the process of dying and are confronted with more pressing problems than unemployment issues. You're correct in identifying that "Necessity is the Mother of Invention", the crux of the problem is that large numbers of the unemployed can't wait a few years for the employment situation to improve and turn around. They need employment now! As people I know are want to say, "All I need is a full time paying job with Benefits and all my problems would go away". And how many Nationwide are currently in this boat?

affl, As for "Liberty", perhaps you need to take a lesson from American History. Specifically, the Whiskey Rebellion and other incidents. Where farmers and corn distillers in Western Pa. refused to pay a "TAX" on whiskey production and attacked and kidnapped Federal Officials trying to enforce the Law and collect the tax. Then Washington and his Admin., called out the Militia, marched into Pa., broke up the Rebellion, arrested some 20 Rebels, tried them for treason, paroled some and convicted two for treason. Washington later paroled these two as well. So much for "Liberty" on the Western Frontier in the U.S..

Perhaps, todays "Tea Party" ought to take a lesson from this...

Judge Posner What About Demographics?

Demographics play a critical role here. U.S. growth from 1983 to 2000 coincided with baby boomers ranging from age 19 to 37, with a median of 28 (in 1983) up to age 36 to 54, with a median of 45 (in 2000). Now the baby boomers age range is from 48 to 66, with a median of 57. The amount that a person contributes to the economy increases rapidly on average, both in terms of production and consumption by individuals and their families, from age 28 to 45. That amount starts to level off and perhaps even decreases from 45 to 57, again considering production and consumption by individuals and their families. This trend does not bode well for the next 10 years.

Judge Posner and Becker your thoughts on this?

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Thanks for Posting Mr. Posner. Very usefull

Anne Roberts

The employment rate is in a steady downward spiral the past few years. We all know this, despite the fact that we refuse to believe it is happening.

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Part of the reason why unemployment remains high is that the Obama Administration is not simply trying to boost aggregate demand, but is actually trying to alter the composition of aggregate demand. For example, there have been significant cut backs at NASA and in defense procurement, and more are planned. In addition, he's made a decision that certain segments, such as alternative energy, construction of infrastructure, etc., should be boosted, while others should be cut. In short, his plan is not just a "growth" strategy, but is also a "change" strategy.

But anytime there is a shift in demand or production, that necessitates a corresponding shift in labor resources from one industrym that is cut to another which is stimulated. And the way that happens is that workers in one industry are laid off, and must seek work elsewhere. Ultimately, they may find work in those industries which have been stimulated, or in industries where openings are available because workers have quit and moved to the stimulated industry. But it takes time, and in the meanwhile, those workers will be unemployed.

So it is not just the LEVEL of aggregate demand which is important, but also the composition. If the government has embarked on a policy designed to alter the composition of aggregate demand, that will inherently cause a higher level of unemployment as workers move into those industries which have been stimulated, and out of those which have not.

John Laing

The law of diminishing returns may well apply to stimulus, to all "pump priming."

Everybody thinks low rates are a good thing - wrong.

The Fed is holding rates down, artificially; that's great for the Treasury which has to service all that federal debt but it's bad for market lenders if the interest rate is less than the risk premium.

Lenders can't lend if the risk exceeds the rate.

As rent control is bad for the supply of apartments, so too rate control is bad for the supply of loans, business expansion and jobs.

What's good for the Treasury is lousy for the economy.

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