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Drastic job creation by the US federal government - as drastic as the bank bailout, as drastic as the stimulus bill - is what is needed, I think. And this has to be about creating and paying for the jobs of tomorrow.
But we can not take the FDR comparison too far. The biggest difference is that today America is in a global world. The global cooperation has not happened yet. The global institutions have not been created yet.
So many big things have to happen at once. Rapid pace political reform that sets America on the path to total campaign finance reform would be one, but instead you have the drama of old man Rangel dragging his feet all the way to jail time.
There are monetary moves to be made, and Paul Krugman has talked about this. I like the idea of letting inflation go up one notch so it becomes expensive for the private sector to keep sitting on the two trillion dollars it is sitting on.
I am leery of only construction jobs. I have not seen a big push for universal 100 MB broadband yet. A big chunk of that is political work that does not cost the government any money. It is about introducing some major competition in to that sector.
There is one overriding theme though. Most people seem clueless.
How to Fix the Economy: An Expert Panel: a paper forecasting high unemployment, low housing prices, and very low growth through 2017..... An expansion in credit, debt, and deregulating over the past 10 or 20 years got us here. ..... it will take time, but it need not take time. ...... We are unwilling to do drastic things that will improve the situation of households. You can do that by raising their income so they can meet their debt burdens. ...... Without drastic reforms to entitlement programs in the United States, we are really talking about something that will feel like the 1970s—but last for 20 to 25 years. ..... We should be thinking about modernizing our housing sector, improving the kind of mortgages we offer, and encouraging innovation. ...... Half of the budget is Social Security, Medicare, and Medicaid... Nondefense discretionary spending is 4 percent of GDP. ..... I don't think we are going to modernize Fannie and Freddie very soon. Fannie and Freddie hold the preponderance of mortgages in the United States. ...... Non-Fannie and Freddie mortgages trade in the 6-to-8 percent category, as opposed to the 3½-to-4 percent category [for Fannie and Freddie mortgages]..... Roosevelt did things fast. He created the 30-year mortgage within months of his taking office. We need that kind of spirited innovation. ..... The most difficult issue was Too Big to Fail, and that was not dealt with. We are going to be creating even bigger financial institutions ...... We would have moved toward solving the problem if we had broken up the large institutions where they are not too big to fail. ...... It is jobs that are affecting housing prices, not the other way around. Mainly it is the failure to generate convincing economic prospects that keep people from hiring. ....... 16 percent of [Americans] would like to have jobs but don't. ..... something on the order of a 30 percent cut in Social Security taxes for four years. That would create immediate incentives for hiring. ....... continued backlash against domestic institutions ...... The key reason firms aren't hiring is that the economy is growing so slowly ...... more public projects .... Public projects are part of what we should be doing—New Deal, Civilian Conservation Corps-type projects—because unemployment is sapping the national morale. ..... general revenue sharing ..... the global economy faces a serious structural condition, and that is lack of global aggregate demand in which the developing countries continue to save and the developed countries no longer can finance prior levels of consumption ....... encourage China and other Asian countries to develop internally as opposed to simply externally for export. ...... we are not just broke once. We are broke about six times over ...... When a government is in an unsustainable fiscal position, spending more money does not improve the economy. ....... The only one that has the capacity to borrow in sizable amounts is the U.S. government. ..... to suggest that the government now contract fiscally in terms of reducing its deficits to me is simply going in the wrong direction. ..... people are very upset. They feel that the country is not theirs, and that a small group of wealthy people who get bailed out and bribe the government are in charge....... The issues are not that clearly understood today. The system is more complex. What has been legislated is a Rube Goldberg contraption. And that is wrong...... The engine of global growth is shifting from the United States to other countries ...... Firms are not buying new buildings, but they are buying new computers. ..... The most important thing we have going for us is our entrepreneurship and flexibility. ...... We are creating a Financial Oversight Council which will be worrying about systemic crises, and an Office of Financial Research, which is going to be collecting data. When we had this crisis we didn't know what was happening. ...... create jobs for the future, as opposed to jobs for current consumption ...... for the Federal Reserve to continue the quantitative easing and be even more innovative. They have to do more.
