Economists speaking the unthinkable?

[unixronin]

Boston University economics professor Laurence J. Kotlikoff says that the US is bankrupt.

Not entirely unrelated, a time-lapse map of county-by-county unemployment rates in the US from January 2007, month by month through May 2010.

And last but not least, the Christian Science Monitor graphs total US unemployment from about mid-1995 through February 2010.

(Remember, official unemployment rate numbers only count those receiving some form of government jobless assistance — unemployment benefits, job retraining, government work search programs etc — and do not include those whose unemployment benefits have run out, or "discouraged workers" who still need a job but have given up trying to find one because they believe there are none to be had.  The latest Bureau of Labor Statistics report, if I'm interpreting it correctly, reports an official rate of 9.5% as of the end of July, but that rate rises to 11.2% including discouraged workers and other long-term unemployed who do not qualify under the BLS rules, and to 16.1% if "involuntary part-time workers" — those who want to work full-time, but can find only part-time work — are included.)

Comments

[ithildae]

It certainly feels like we have hit our credit limit. Hard. The trouble with the IMF mindset is they think the way to prosperity is by raising taxes and cutting services. Two things guaranteed to tank your GDP out to the horizon. Americans seem to be somewhat more resistant to taxes than our friends in Europe, collection levels stay the same, regardless of the tax rate.

Unemployment is still lower than during the Great Depression. That doesn't feel nearly so satisfying when you are the one wanting to work, but can't find anything. On the bright side, Germany seems to be back at pre-recession growth and unemployment. So there is a working model for recovery. Unfortunately, we seem to be modeling Japan from the 1990's.

[jhetley.livejournal.com]

Official statistics also don't count people like me, self-unemployed.

[lebo-superman.livejournal.com]

The only surprise here is that someone "of authority" is saying it, and the media is picking it up and printing it. Those of us with more than two neurons connecting in our heads have known this for quite a long time.

[unixronin.livejournal.com]

Exactly: It says something that it's being openly spoken and printed in the mainstream media, not just whispered behind closed doors and speculated about on blogs. The analysis is pretty damned alarming; I think it's pretty safe to say the economy would not withstand a sudden doubling of government withholding as a percentage of GDP. Even phased in gradually over several years, it would cause a complete crash.

[jilara.livejournal.com]

Watching the map is like watching bacteria infecting a petri dish. It's scary when you realize the body that's being infected is, well, us. The U.S. as a whole. Bacteria, at this point, start to die off. And the areas become "clean" again. That would be the people falling off the far end of unemployment...

[unixronin.livejournal.com]

An interesting, but rather disturbing, analogy.