Rebuild America…or Nothing?

“Be patient” on jobs they tell us. Just a little more time and we’ll all be going back to work. Right!

The June numbers don’t reflect anything like that. Recently I was speaking to a colleague who had just written a piece in which he referenced the return of jobs and I just had to know what he was seeing that I couldn’t.

“Steve,” I asked, (I call him Steve because that’s his name) “where are these jobs being created? Doing what? For whom?”

His answer was a deflection. He implied that my reporting was negative by saying, “I chose to report the positive things that are going on.”

So from his perspective, the creation of 18,000 low wage private sector jobs as bed-pan porters is positive. But it’s really a step backward. It says more about an aging population needing more long term care than it does about jobs.

We need to create 150,000 jobs every month just to accommodate the new entries into the workforce. There are currently 14 million defined as unemployed because they are still receiving unemployment benefits. Experts estimate that there are as many as 15 million more who have maxed out their benefits, don’t qualify, or are working  but not to their potential.

But before we can make progress in reducing the number of unemployed, we have to stop going in reverse. In order to maintain the status quo we were negative 132,000 jobs in June.

I fear a tipping point. Could there come a time when the number of people not working and spending will lead to additional mass lay-offs?

Jobs doing what?

If you’ve noted a lack of specificity regarding what industries or what companies will be creating these jobs you have observed well my student.

The reason is a simple one; no one knows.

And that is a problem. Jobs don’t just appear. They must be created. But there isn’t anything to do. Someone has to make something, or move something, or design something, or create something. But almost every industry is reigning in and government is laying-off. What jobs?

The people we have elected come from such elite backgrounds that they cannot fathom that jobs don’t just magically appear because enough time has passed.

No amount of time will ever erase the scars of the last five years and we are nowhere near the end of this.

There are four reasons that the private sector will not lead us out of our unemployment crisis no matter how many tax breaks we throw at them.

1.    Lack of business

High unemployment reduces demand and consumption. Unless something extraordinary occurs it will be a very long time before the impact of that loss of spending

2.    Lack of capital

The too big to fail banks we bailed out received that windfall based on the argument that they were needed to make capital available for job creation. But these institutions aren’t lending. They know it’s going to get worse. The money is all squirreled away in off-shore accounts in the Caymans and unless we claw it back it, ain’t comin’ back.

3.    Lack of confidence in the future

Many small businesses, the real engines of commerce, were swamped by the backwash of a global economic tsunami. They are probably through being employers.

The private sector is unable to create these jobs in residential and commercial development. The funding isn’t available and no end user exists. Ghost towns are already quite common.

4.    Only the little people pay taxes

Remember that in our system of taxation, profitable companies are practically exempt from taxes already.

Those who still have jobs haven’t had a real wage increase in three decades which means that they alone cannot spend us out of this.

According to the bureau of labor statistics, BLS, the industry with the greatest gap between workers and available jobs is construction.

Manufacturing and construction drive an economy. But we don’t make much and we aren’t building anything.

Ironically, at the same time the construction industry sits idle, another bridge collapses, a levee fails, a nuclear plant melts down, or a pipe line explodes.

You probably don’t see it, but America is falling apart.

According to the American Society of Civil Engineers, 26% of U.S. bridges are in urgent need of repairs. But it isn’t just bridges. During good times we deferred maintenance on most of our infrastructure and now we are in danger of dams collapsing, water systems failing, sewer systems leaking, pipelines bursting, levees collapsing and our parks and public buildings chained off and boarded up because we cannot afford to maintain them..

When you add up all of the hidden dangers waiting to take the lives and limbs of innocent Americans it is apparent that this is a much bigger crisis than terrorism.

The Civil Engineers estimate it would take $2.2 trillion over five years to fix everything. That is less than half of our military budget over the same period.

Maybe for five years we could be fifty percent less menacing abroad while we rebuild America.

Think of all the component parts that would have to be manufactured. Everything from bridge supports to electronics would be required. Require that every piece be manufactured in the United States.

In order to manufacture and construct stuff you need raw materials. Loggers and miners go back to work. Jobs would be created in transportation because you have to get both the raw material and the completed parts to their respective sites.

Wholesale trade would boom and consumers would go back to spending. Every sector would grow jobs overnight.

And when we were done, we would have something to show for our investment. We would have built an infrastructure that would be the foundation that would position us to compete in the future.

But the very idea of doing anything to actually create jobs to stimulate more tax revenue hasn’t occurred to anyone in Washington.

Instead, the plan is to reduce essential services to the elderly, the weak and the sick and cap the debt ceiling. That is totally the wrong thing to do. Now is the time to spend like there is no tomorrow or there won’t be any jobs being created by any sector.

I know that going further into debt to create jobs is a hail may pass but we are either all in or all out. It’s fourth down, the clock is running out, we are behind by four points; we have to go ninety-nine and a half yards. Congress wants to take a knee and protect the ball. But me, hell, it’s my money and I want to go for it.

The only way the existing $15 trillion dollars is ever going to be paid down is by unemployed and under employed tax payers going back to work.

We are Americans by God and I am sick and tired of people maligning our willingness to work hard. The American workforce is the most productive on the planet and we can work our way out of this if we have jobs to do. And there is much to be done.

If Congress refuses to raise taxes on the wealthy or compel large companies to pay their fair share, and there isn’t enough tax revenue from workers to pay for even the most basic services without borrowing, and the debt ceiling isn’t raised, Government won’t be able to provide any services at all.

Other than a massive job creation program to rebuild America, I do not see any way out. Do you understand what I am saying? The recession isn’t over and it never was. It was another illusion cooked up by Wall Street. GDP appeared to be up because Wall Street was still doing phony deals with phony accounting and converting it to obscene but completely bogus bonuses.

If anyone has a scenario for how and when we climb out of this, other than rebuilding our infrastructure, tell me.

Over the course of my lifetime, we’ve had the Cold War, a war in Korea, the War on Poverty, a war on drugs, (unless big pharma makes them), a war in Southeast Asia, Operation Urgent Fury (Grenada) (We won that one), Operation Just Cause, (Just Cause We Said So, Manuel Norriega. Panama), Operations Desert Storm and Desert Shield, (Persian Gulf) Somalia, Bosnia, Operation Enduring Freedom (Afghanistan), and Operation Iraqi Freedom.

Turns out that the Iraqi people are so happy about it they keep trying to blow us up. Some people just can’t handle freedom, eh?

So what’s one more War?

I propose we declare a “War on America’s Decline.”  And, promote it as “A war we can win!”

Take half the defense budget and devote it to making America great again. Bring our troops home and stay out of other people’s business for the next five years while America gets healthy.

Sure, it’s 99 and a half yards but we can do this. We have to try.

We need to get the crowd behind us. “Spend baby, spend! Spend baby, spend! Go team.

Take a look at this chart and note how many industries would be hiring to fight the war.

So if not this, what? And if not now, when?

George W. Mantor
The Real Estate Professor
Founder, American Foreclosure Resistance Movement
http://www.realtown.com/gwmantor/blog
http://www.gwmantor.hersid.com/

“First they ignore you, then they ridicule you, then they fight you, then you win.”  —  Mahatma Gandhi

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