Obama has spent heavily…over $6 trillion added to the national debt. But the unemployment rate has not dropped below 8%-why is this?
Reagan was heavily criticized for his deficits spending-but the unemployment rate dropped drastically during his first term. Obama has spent, but the UR rate remains very high-why is this?
The US unemployment rate is 7.8%.
In my humble opinion it is because the billionaires and the multi-national corporations are undertaxed. So let’s raises taxes on them and see if unemployment goes down. We’ve done 30 years of the other way, so let’s give it 30 years to take effect.
I’ve been talking about this for years, but finally others are saying the same thing, including Nobel Laureates…
There are fewer jobs due to automation. And no, the market will not magically make them appear, as every new business has been and will be set up in such a way to minimize hiring labor. iTunes and NetFlix employ dramatically fewer people than Tower Records and Blockbuster, and the current job market is reflecting that.
As far as businesses being undertaxed, this is true. There is only an upside for them to eliminate labor, and no tax liability for doing so.
Reagan’s deficits lowered unemployment by pumping money into the economy. It’s called stimulus spending.
Uh, deficit spending is stimulative. That’s basic economics. Reagan’s spending lowered the unemployment rate. So did Obama’s. The unemployment rate remains high because four months ago it was very high. This is what we call progress. It’s much harder than just burning the place to the ground or selectively remembering how long it took to get out of a much smaller recession thirty years ago.
This. We just barely dodged what could have easily been The Great Depression Mark II.
Are we significantly more automated today than we were in 1999, when we had unemployment below what many economists thought possible?
As for as the question in the OP, Reagan started out in a much shallower hole than Obama. So much wealth disappeared this time that the stimulus, though big, wasn’t big enough. Also, back then state governments didn’t start laying off people, which hurts still more.
Definitely. Perhaps this Associated Press series will clarify.
There is a lot of talk about reshoring. Manufacturing is coming back to the u.s. in part because labor costs overseas have gone up, as have transportation costs. But also because the robot gets paid the same in the u.s. as in china.
That doesn’t respond to my question. I’m not disputing the unemployment figures, just that automation has much to do with them. There are lots of reasons beyond automation for the jobless recovery. For instance, consumer spending has not bounced back as much. Companies are sitting on cash and not investing it in ventures which create jobs. You might also blame off-shoring, but that has nothing to do with automation, in fact those factories are less automated than ones in the US. In Silicon Valley, where we are seeing consumer demand, the job situation is very good, with lots of construction and increasing home prices - as well as crowded highways.
ralph, part of the reason Reagan’s spending helped unemployment and Obama’s hasn’t (as much), besides the point someone else made about the percentage starting higher, is that many government jobs have gone away, which didn’t happen during Reagan’s term.
A couple of million new jobs have been added to the private sector, but government (at all levels) has seen a drop of more than half a million jobs.
And how will increasing taxes on businesses increase unemployment?
I was watching something on the news that was saying the housing bubble was a big reason unemployment has lasted so long. Home construction employs a lot of people and we haven’t been building a lot of homes since 2008.
Increasing taxes on businesses, such as GE, which is highly profitable and pays no taxes, will allow a number of things: reduce the tax burden on individual persons, allowing them to increase their payrolls, allow government to hire more workers, etc.
Entities like GE are the reason the economy is topsy turvey. They are very rich and pay no taxes, continually shifting the burden to less wealthy and poor tax payers who cannot invest. The GEs invest in politicians who keep their taxes low and negative at all costs to those who cannot afford to “sponsor” politicians. These GE politicians have no incentive to get everyone working as their jobs depend on continued sponsorship, not on non-gerrymandered, non-sponsoring not as wealthy voters.