Saturday, September 1, 2012

Quote Of The Day

Dean Baker concludes his thoughts on the value of the safety net in a depressed economy:

The reality is that the collapse of the housing bubble created an enormous demand gap in the economy. In the short term, this gap can only be filled by the government, whether we like it or not. Until we do get the economy back on its feet, and start creating the millions of jobs that are needed, the poverty numbers will continue to be horrible. That is why the main route for fixing poverty requires fixing the economy.

Poverty: The New Growth Industry in America

Bad times can be made less bad by a safety net, but that safety net in itself requires that resources be allocated to it. They have to exist in our economy for that to happen. When peoples' incomes can barely manage to maintain their own lives, there's not going to be much left for those who can't find work, or who can't find work that will pay enough.

Maybe one of the ironies of our economy is that the people who advocate tearing down what's left of our safety net are usually the same ones who advocate against the minimum wage. Damn few of the people who advocate these things have ever had to live on either.

Nothing Baker wrote in that column should be news to readers of this blog, or of Krugman, Stiglitz, et. al. The economy needs demand, and demand requires that there be people who can afford to buy goods and services. Right now, those people are in short supply, because far too many of us are unemployed, underemployed, or working at jobs that pay less than the ones we used to have. The trends in our economy do not bode well for that changing any time soon. That means that as the need for our safety net increases, our ability to maintain it will gradually diminish as well.

It's one more reason why the solutions our two major political parties are offering are nonsensical, at least if by "are offering", in the Democrats' case, you mean what they've actually done when they've had the power.

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