The most painful aspect of the economic crisis is that the pain is unnecessary. Ordinarily we think of the economy being limited by the supply of available resources, land, labor, and capital. We can't all have huge houses with servants. In a world where the economy is limited by supply, pain is understandable, even if not acceptable. To give one person more means taking something away from someone else. But, that is not the situation the U.S. or world economy faces today. We don't have 15 million unemployed because of scarcity. We have 15 million people unemployed because of a lack of demand. This is exactly the same problem that the country faced in the depression. All we had to do then to get people employed was to spend money, which we eventually did in very large amounts to fight World War II. That is what we need to do now to end the enormous pain caused by this downturn. Unfortunately, there is a lack of political will to undertake the necessary spending in part because of political hacks running around complaining about deficits. This is why it is especially painful to see Washington Post columnist Robert Samuelson refer to the "scarcity" in which today's youth are being raised. In fact, they are being raised in a period of unprecedented abundance. It only looks like scarcity because the country's economic policy is so awful.
--Dean Baker
