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Article Artículo

Help CEPR in Our Work on Haiti
Dear Friend of CEPR, Several times per year, we at the Center for Economic and Policy Research ask our friends and supporters to consider making a donation to sustain our work. This spring, we are asking for support for a crucial part of CEPR’s internati

CEPR / April 15, 2011

Article Artículo

Economic Growth

Workers

Ignoring the Real Problem
As usual, the economic debate in Washington is ignoring the country's main problem. We are debating taxes and spending cuts when the real problem is boosting demand.

Unemployment is the most immediate problem facing the country. We still have 8.8 percent of the labor force unemployed. And in spite of the happy talk about the economy being on the right path and the recent pace of job growth, the entire decline in the unemployment rate over the last year was the result of people dropping out of the labor force. The share of the work force that is employed remains near its low-point for the downturn.

This is the economic reality and if we had an honest debate in Washington, the two parties would be putting forward competing plans to create jobs, not reduce the deficit. The current deficit is not a problem. If the deficit were smaller, then we would simply have less spending in the economy and more people unemployed. There is not some magic wand that will make the private sector increase spending and add jobs just because the government lays people off.

Dean Baker / April 14, 2011