This blog will be highlighting several different approaches to Fix the Jobs. These approaches have been proposed by thought leaders from all backgrounds and perspectives. Such ideas should be used as a resource for putting together solutions at all levels about how this country should move forward with critical policy to Fix the Jobs. This is the second post in the series. The first post can be found here.
A Liberal Approach
Approximately a year ago, the Economic Policy Institute (EPI) published a paper called From Free-Fall to Stagnation: Five years after the start of the Great Recession, extraordinary policy measures are still needed, but are not forthcoming. The paper outlined the state of the US economy as well as investigated why the economy, specifically the employment market, has not recovered and what can be done to reach full employment. The full paper can be read here.
The paper comes to a conclusion that more fiscal spending will help recover the economy with $2.2 trillion in additional spending over a three year period from 2013-2015. This solution is not realistic in the current political climate and the paper acknowledges that the solution has almost no chance of passing. What can be taken from the paper is the analysis of the economy and why returning to full employment as fast as possible will limit the negative effects the economic downturn will have on future economic growth. The paper’s main concern is that current government policy of focusing on the debt has lowered the country’s potential GDP and without a reversal in policy the country will not recover to its full potential.
The US government can help in fulfilling full employment by making smart increases in spending. Specifically investing in long-term infrastructure projects that will make America more competitive and attractive to business development. The proposal made by the EPI’s scholars is not obtainable but with help from other ideas such as the one put forward in the conservative approach our economy can fully recover. For this to happen we must tell our leaders to Fix the Jobs.