Paul Krugman talks about two of the biggest problems faced by economic societies, namely unemployment and income inequality. He feels like at the very least one of these issues should be made the cornerstone of any government. He then goes on to explain how income inequality and unemployment are linked and how trying to resolve one of these issues could help alleviate the other. Krugman also feels that running a deficit to remedy the unemployment issue should be a no issue and is glad President Obama has picked to deal with unemployment while putting the deficit issue on the back burner a little bit.
It was an interesting take on the situation, and if I were to only go of based on the article I would be inclined to agree with Krugman. Why do you guys think?
http://www.nytimes.com/2014/01/24/opinion/krugman-the-populist-imperative.html?ref=paulkrugman&_r=0
Unemployment and income inequality are the biggest issues facing our economic driven world. I think the popular mechanism here is inequality. Inequality puts money in the hands of people who don’t spend it and as result the economy suffers from demand shortage. Unemployment is the result of income inequality. Fixing unemployment mean bringing back manufacturing jobs, innovation, and investment back to the United States which is impossible. Why would manufacture want to produce goods and services where Marginal cost does not equal marginal benefits? Due to this, more and more manufacturer will continue to produce goods and service were their cost of producing the goods and services will be lower. Fixing income inequality will lower unemployment rate.
ReplyDeleteAs Bien said, unemployment and income inequality are indeed big economic issues that we have to deal with. I personally believe that we should deal with unemployment before income inequality. Income inequality will begin to diminish once more people are working and are receiving a steady income. It would be appropriate to deal with our deficit problems once we've reached the point where unemployment is no longer an issue.
ReplyDeleteI think with trying to alleviate this income inequality and then trying to reduce unemployment, we need to focus on helping lower-income families and ultimately finding ways to educate and help them create wealth. For example, on a mission trip, I observed a struggling family and saw the ways that they were spending their money. I think that by having someone help educate them on managing their money, they would become more aware of what they need to spend it on and save in other ways.
ReplyDeleteIn the end, I think that the government can provide resources and the people must implement the practice.
I agree, I think that economic / money management programs can be beneficial. It is all about the execution... we have seen very successful programs and less successful programs that have taken a lot of money. It will be interesting to see if the national suggested minimum age of 10.10 goes through - what the affect will be on income inequality.
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