After December’s disappointing jobs figures came out recently, Federal Reserve Chairman Ben Bernanke issued an unhappy prediction.
He said the United States is in for a long period of high unemployment.
Does he think it will take a year or two to get back to a somewhat more normal unemployment rate of about 6 percent?
No. We wish his estimate were that “good.”
Bernanke predicts, instead, that it will take four or five years before joblessness drops to about 6 percent. And even 6 percent is not ideal.
That long-term joblessness for many millions of Americans will affect not only them but the financial circumstances of even those who do have jobs.
“Persistently high unemployment, by damping household income and confidence, could threaten the strength and sustainability of the recovery,” Bernanke told the Senate Budget Committee.
Shouldn’t it be obvious to everyone by now that massive government “stimulus” spending has not helped reduce unemployment?
Remember: The president said that if passed, the $862 billion “stimulus” would keep unemployment below 8 percent. Yet today, the nation’s official unemployment rate is an alarming 9.4 percent. And millions more Americans are not counted in that “official” figure because they have given up the attempt to find jobs. So true unemployment is much worse than 9.4 percent.
Government spending is not the solution to joblessness. The path to job creation is free enterprise unhindered by the twin threats of excessive taxes and undue regulation.
That is worth remembering as the federal government’s spending-fueled debt continues to rise beyond any reasonable level.