Mark Thoma focuses on the unemployment issue. Even the Wall Street Journal is beginning to realize that this is a problem that goes beyond people's willingness to work. The prevailing conservative view seems to be that if we'd just stop giving these people benefits, they'd get off their duffs and find a job. I'm sure there is a percentage of the unemployed who are happy to accept benefits and have no intention of looking for a job. But current estimates of the unemployed--that is people who are actually without a job, not the current definition of unemployed* is just south of 15% of the workforce. Does anyone really believe that we have that many deadbeats in this country? The people who are receiving benefits that are too small to pay their mortgages and other debts and who are running through their retirement savings just to keep their heads above water are not lazy--they are desperate. This, it seems to me, is a hidden time bomb in our long term social health. People who were saving on a path to retire comfortably, are now never going to be able to make up the loss of their savings. They'll either have to work longer or have a standard of living way below what they expected in retirement. The unemployment of today will be a deadweight loss to the economy for years to come.
* unemployment is defined as those people who are looking for a job and can't find one. It doesn't include people who couldn't find a job and gave up or people who are working part-time, even thought they'd rather be working full time.
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