Dean Baker suggests four creative programs that would help the economy now:
In his State of the Union address, President Barack Obama made it clear that he intends to devote considerable energy to solving the unemployment problem. The following excerpt from Dean Baker’s False Profits: Recovering from the Bubble Economy describes four innovative programs that would create jobs and benefit the economy in the long run. Over at TAPPED, economic experts will share their own progressive ideas for getting people back to work.
The country having to endure long periods of high unemployment is wholly unnecessary for the simple reason that we know how to prevent it. Ever since John Maynard Keynes, we understood that high unemployment, as occurred in the Great Depression or what we are experiencing in the housing crash recession, is caused by a lack of demand in the economy. The way to address high unemployment is to create demand. In other words, the answer was and still is to throw money at the problem.
The government can usefully spend money on a long list of items to boost employment during the downturn. In fact, the downturn provides an opportunity to experiment with new programs because the constraints of scarcity do not apply and taking risks that might not otherwise be justified makes sense. In other circumstances, risky projects might come at the expense of spending what we know to be valuable, or might require higher taxes, but the present goal should be to find ways to generate demand in the economy. That goal gives our country an extraordinary opportunity to be adventurous.
