Robert Maxwell wrote:
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?
Gee, I am one of the guys on the left who is for stuff like basic income so I am not opposed in any way to the welfare state. We have overdone it a bit in Europe in the past but you guys are certainly in dire need of more and not less welfare.
All I am trying to say is that social security destroys work incentives whereas expansive monetary and fiscal policy are relatively unproblematic unless you drive up inflation expectations or don't reduce your public debt in the boom. The forme issues is also ideologically hotly debated whereas the latter is more of a technical macroeconomic issue. Sure, the stimulus has also been pissed upon by the right and there are the lunatic zero-inflation libertarians but precisely because it is about fairly technical stuff it is not as ideologically mined as a more concrete issue like food stamps.
I know you're not opposed to the welfare state, and perhaps it has been overdone in Europe. I'm just saying what we have in the US is pretty damn pathetic--unless you are a senior, then it is just somewhat less pathetic.
Unfortunately, here in the US our political options for "economic stimulus" are limited to tax cuts and, um, spending cuts. Yep, that's pretty much it. Republicans have sold the lie that Obama's stimulus was an expensive failure, so that sort of thing is off the table for the foreseeable future. You can imagine my frustration.