Need Jobs?

A social Explosion? Over the last 2 years we have seen a massive balloon of leverage and glut come to a startling end. With that end we have also seen a massive expanse of government spending and stimulus to offset the potential for a global depression. We have set the table for the world economies to eat themselves into a gluttonous mass of malignancy. Never in the history of the world have the dinner guests been so intertwined in the dependency of each others consumption. Now we have taken the philosophy that we must spend in order to pay the bill. It’s the equivalent of ordering more for the dinner party in hopes that someone passes out from over indulgence so we can pick their pocket. The problem might be that no one brought nay cash to the party. The question that has to be looming in the minds of every human who understands even the most basic principles of economics- Has this created the next balloon to burst? The deeper question might even be- If this bubble or balloon bursts without a financial recovery (read jobs) will the impact be even that much more severe? Could this hurtle us into a massive cycle that we won’t see the end for years to come? Our current struggle and potential market recovery is lacking one vital component- Jobs. The labor market is in dire straits. The Great Recession has left behind a waste land of unemployment," said Dominique Strauss-Kahn, the IMF's chief, at an Oslo jobs summit with the International Labor Federation (ILO). The world has not yet escaped a deeper social crisis. He called it a grave error to think the West was safe again after teetering so close to the abyss last year. "We are not safe," he said. The beauty of western business discipline is to create cheaper and cheaper units of production. It can be argued that the world revolves around this principle. If we hire to create products- Then we fire due to advances in technology that create production without the cost of labor. We will create jobs. Or so the hope goes. What happens when frankly the economy no longer has a place for the unemployed? The study cited evidence that victims of recession in their early twenties suffer lifetime damage and lose faith in public institutions. A new twist is an apparent decline in the "employment intensity of growth" as rebounding output requires fewer extra workers. As such, it may be hard to re-absorb those laid off even if recovery gathers pace. The world must create 45m jobs a year for the next decade just to tread water. Olivier Blanchard, the IMF's chief economist, said the percentage of workers laid off for long stints has been rising with each downturn for decades but the figures have surged this time. Mr. Blanchard called for extra monetary stimulus as the first line of defense if "downside risks to growth materialize", but said authorities should not rule out another fiscal boost, despite debt worries. "If fiscal stimulus helps avoid structural unemployment, it may actually pay for itself," he said. "Most advanced countries should not tighten fiscal policies before 2011: tightening sooner could undermine recovery," said the report, rebuking Britain's Coalition, Germany's austerity hawks, and US Republicans. Under French socialist Strauss-Kahn, the IMF has assumed a Keynesian flavor. But I ask- To what end? Can the IMF and the western world float the bill for this lavish dinner? Or do we all eat till we pass out?