Solution to Unemployment
It is rather disturbing to listen to some of the "TV Economists" crowding the news channels. The discussion is often couched in non-sensical terms like "employers are not hiring OR employers are beginning to hire". The majority of these economists are from the old school of supply economics; a theory which has been scientifically and empirically debunked. The discussion begins by suggesting that monetary and fiscal incentives to employers (usually the rich) would result in business expansion and employment creation. This is a nonsensical argument for the simple reason that the only incentive to increased employment is demand. Employers hire workers for one reason; and that is to increase their production to satisfy effective demand. In fact employers will only hire new workers if their existing workforce cannot increase their production; that is if they are currently operating at full capacity.
It should therefore be obvious not only to those "TV Economists" but to any rational mind that the solution to unemployment must be addressed on the demand side. The solution is therefore to find the mechanisms for stimulating effective demand. There are just two basis mechanisms; consumer purchasing power and production subsidy. There are several interracting mechanisms to these two approaches. However the main purpose is to incentivise producers to increase production to meet the excess demand stimulated by increased consumer purchasing power. In the next installment we will discuss the concepts of elasticity and it relates to the unemployent solution.
Comments can be sent to Email: firstname.lastname@example.org.
Keith Reyes, PhD.
Well, taxing anyone at this time would definitely be counter productive. I don't even know why people seem to think that would stimulate the economy. Employers just have too much uncertainty in the future to justify expansion. Too much government red tape and unnecessary restrictions for small businesses and entrepreneurs to want to gamble on. Also hiring anyone now days is a monumental endeavor as it is almost impossible to fire a person if they don't work out. We need to grow the economy but that can't be done while the government has its boot on the neck of job creators. Government does not create jobs. For a limited time, the Relationship Capital Co. is offering free job search training for your unemployed readers at: http://RelationshipCapital.CO/JobNetworkingPrimer/?utm_source=bl&utm_medium=sm&utm_content=a