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Old October 1 2012, 04:07 PM   #17
Robert Maxwell
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Re: Can Capitalism be replaced ?

horatio83 wrote: View Post
Robert Maxwell wrote: View Post
I am a big fan of the way they do things in Germany and I think we could learn a lot from them.
Not really. Of course the welfare state is better in Europe but the US has historically always been far more open to moderating the business cycle and Obama's stimulus, despite being far too small, was still larger than anything that happened on this side of the big pond. German anti-Keynesianism wreaks havoc in Europe, leading to two-digit unemployment rates and youth unemployment rates (right when the babyboomer generation is retiring) between 10% and 50%.

Smoothing the business cycle and fighting unemployment is the first duty, caring about people who are out of work the second. Why? Because the first issue is crystal clear, there is nothing bad about ensuring a high employment rate via increasing public demand during recessions. Yet the second does contains some trade-offs, unemployment insurance, universal health care and so on do decrease work incentives.

You want to help people escape the vicious cycles of unemployment, loss of self-esteem, depression and so on but any help has positive and negative effects so it is better to fight unemployment in the first place.
Why can't you fight both at the same time? You shave a couple percentage points of the unemployment rate through Keynesian stimulus, that's great, but at the same time you've left the remaining unemployed to drown in misery. Long-term unemployment, as it currently exists in the US, is not something people recover from easily--if they recover at all. We should do whatever is possible to soften that blow while at the same time encouraging hiring.

It sounds like you are saying the government can't multitask. Why not?
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