Krugman Comments on the Nearly Half-Million Jobs lost in June

by Deb Cupples |  The Bureau of Labor Statistics tells us that our nation lost 467,000 jobs last month -- the unemployment rate is at 9.5%.  The number of unemployed persons has increased by 7.2 million since our recession started in December 2007.

In a piece entitled "That 30s Show," Nobel Prize winning economist Paul Krugman expresses  (understandable) concern:

"Since the recession began, the U.S. economy has lost 6 ½ million jobs — and as that grim employment report confirmed, it’s continuing to lose jobs at a rapid pace. Once you take into account the 100,000-plus new jobs that we need each month just to keep up with a growing population, we’re about 8 ½ million jobs in the hole."

"And the deeper the hole gets, the harder it will be to dig ourselves out. The job figures weren’t the only bad news in Thursday’s report, which also showed wages stalling and possibly on the verge of outright decline. That’s a recipe for a descent into Japanese-style deflation, which is very difficult to reverse. Lost decade, anyone?

"Wait — there’s more bad news: the fiscal crisis of the states. Unlike the federal government, states are required to run balanced budgets. And faced with a sharp drop in revenue, most states are preparing savage budget cuts, many of them at the expense of the most vulnerable. Aside from directly creating a great deal of misery, these cuts will depress the economy even further.

"So what do we have to counter this scary prospect? We have the Obama stimulus plan, which aims to create 3 ½ million jobs by late next year. That’s much better than nothing, but it’s not remotely enough. And there doesn’t seem to be much else going on."  (NY Times)

Since at least January, Dr. Krugman has been urging our politicians to come up with a real stimulus plan: i.e., a plan that was big enough to have a hope in hell of seriously improving our economy.

How many times does Dr. K have to be proven right before the folks in Washington actually start listening to him?

Memeorandum has commentary.

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* Bank of America Publicity Stunt: Lewis Off Board but Still CEO

* Are Bailout Funds Being Misused? 

* Execs Made Millions While Driving Companies into Ditch

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Comments

[flowerplough]

Dr. K proven right? I don't see it. Don't see how we can be so deep in debt and yet plan to borrow our way to economic health. Big government borrowing and spending, big job losses, even bigger government borrowing and spending, fewer job losses? Riiight...

How'd Thatcher put it? "The trouble with socialism is that you eventually run out of other people's money." Sounds like Kruggy, if he were king of the forest, would just run out of other people's money that much quicker.