Economic indicators are pointing to a scary scenario, that jobs will be hard to find for years, says Nobel Prize winner Paul Krugman.
“The job market — a market in which there are currently six times as many people seeking work as there are jobs on offer — will remain terrible for years to come,” writes Krugman.
“The administration’s own economic projection — a projection that takes into account the extra jobs the administration says its policies will create — is that the unemployment rate, which was below 5 percent just two years ago, will average 9.8 percent in 2010, 8.6 percent in 2011, and 7.7 percent in 2012. This should not be considered an acceptable outlook.”
Krugman writes in The New York Times that there will be an “enormous amount” of human suffering over the next few years for Americans.
“Unemployment that remains that high, that long, will cast long shadows over America’s future,” adds Krugman.
Krugman believes that there is a peculiar form of damage that will likely result from long-term high unemployment: a huge rise in child poverty.
“There’s overwhelming evidence that children who grow up in poverty are alarmingly likely to lead blighted lives,” writes Krugman.
“These human costs should be our main concern, but the dollars and cents implications are also dire.”
Forecasts by the Congressional Budget Office, Krugman reports, show that over the period from 2010 to 2013 there be a growing “output gap,” or a noticeable difference between the amount the economy could have produced and the amount it actually produces.
That gap may be as high as $2 trillion. “That’s trillions of dollars of productive potential going to waste,” Krugman opines.
America’s job losses increased during September, propelling the unemployment rate to a 26-year high of 9.8 percent. Actual U.S. unemployment, counting those who have given up looking, are closer to 17 percent, according to some calculations.
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