Job crisis

1. Deficit Crisis or Job Crisis?

5. Focus on the Deficit

7. Debt milestones – born into debt USA born (Jan 1, 1791) $75,463,476 Lowest ever (Jan 1, 1835) $33,733 Pre-Reagan (Oct 30, 1980) $907,701,000,000 FY 2011 (currently) $15,476,000,000,000

8. Pre-Reagan $1.0T Reagan $1.9T Bush II $6.1T Obama $2.4T Who holds the debt When the debt was accumulated

13. Pre-Reagan $1.0T Reagan $1.9T Bush II $6.1T Net debt = $8.1T Obama $2.4T

14. 2Q 2011= 95% 2Q 2011 = 57% % of GDP

18. On taxes ….briefly

22. Actual corporate taxes paid as % of GDP by OECD countries

24. Is there a deficit crisis?

25. The jobs crisis

27. WSJ: Untangling the Long-Term-Unemployment Crisis

29. What are the costs of unemployment?

30. Okun’s Law: 1% ↑ in UR  2% ↓ in GDP

33. Why are there jobs? Key concept is “aggregate demand” [AD] Think of “AD” as “GDP ” This means jobs

34. Why recessions? Because “leakages” occur in the spending stream If not, workers are laid off

35. The market solution

36. What if markets don’t adjust? Savings

37. Why recessions? Because “leakages” occur in the spending stream Tx Government spending (G)

40. Central paradox Why has the deficit debate taken precedence in the midst of massive, destructive unemployment?

44. What’s to be done? The desperate need for deeper changes