A Gloomsday Scenario
…that makes very depressing sense.
With stocks rallying and early signs the economy is stabilizing, when will the employment situation improve? The answer for many may be never.
This is because the “natural” rate of unemployment, the level at which the economy is running at full steam, could move higher as entire sectors of the economy, such as automobile manufacturing or financial services, are permanently downsized. These jobs are just not coming back — which means people will either need to retrain, seek low-skilled employment, or drop out of the workforce.
According to Edmund Phelps of Columbia University, and winner of the 2006 Nobel Prize in economics, the natural rate could rise from 5.5% to as high as 7% as this process runs its course. If this is the case, millions of Americans will be left out of the immediate recovery.
The ranks of the non-taxpayers will swell, through no fault of their own. I can’t wait to see what our President will do then to fund his adventures in governance.
Biz | tree hugging sister | 
May 5, 2009 9:35 am
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Well, if past is prologue, the rest of the workforce will be made to foot their bills, and the underlying strain on the economy will permamently increase.
The Dems created the model for welfare dependency in the 1960s. Now all they have to do is say Republicans will take away the checks and the Dems get all the votes (I’ve seen it personally more than once; it works). All O and Emmanuel are doing is expanding the dependency to working class people.
Welcome to the new plantation.