First, the Recovery Act is winding down, so no help there. But even worse, the realization that we really need to do more on this front is under attack by politicians of all stripes. For political purposes (winning the election next year), the Repugs want to argue that the Dem's Recovery Act has failed.
Meanwhile, prominent Dems, by way of political cowardice, either seem to largely agree, or, lest they jeopardize future campaign contributions from fat cats, are afraid to get near anything that smells or looks the least bit Keynesian.
Major problems that must be dealt with:
The weak job market: We live in a 70% consumption economy (i.e. 70% of our growth in the US economy comes from the purchases made by individuals and businesses), and if jobs and paychecks are scarce, and fiscal/monetary stimuli are fading, that purchasing is going to be minimal. Even worse, a self-reinforcing weak-demand cycle gets set into motion that's very hard to break out of without enormous government spending.
Productivity and technology: There used to be something called "labor hoarding" where even when demand faltered, firms would hold on to many of their workers, either because of union contracts or because they wanted to make sure their skilled workforce was around when things began to pick up.
Now, however, firms engage in a "just-in-time-inventory" approach to hiring. It's a leaner approach, hiring-up when demand spikes, and laying off just as soon as it tapers off. You squeeze more productivity out of the folks you keep, and then you avoid committing to permanent hires for as long as you can.
But there's something else going on here too. The pace of new "labor-saving technology" is accelerating, especially in manufacturing. Labor saving via new technology has been going on forever, of course, but now the capital intensiveness of production is growing at an ever faster rate, which means that ever more of a company's investment goes into labor-saving capital technology, and ever less of it goes into workers' wages. Why so? Because it's more profitable of course. This is why jobs will be quite scarce in America for a very long time -- until the virtually impossible happens: the length of the work day/week/month/year is somehow shortened, which will be the ONLY way we can create more jobs . . even though the total work load is not increasing ( and may well be decreasing)!
Other problems
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