Its Jobs, Jobs, Jobs

Did you see the report last week from the Labor Department last week? The jobless rate is the lowest since Bush’s recession.

Initial Jobless Claims Tumble to Lowest Level Since 2008
Claims number falls 20,000 to 368,000
National Journal
By Clifford Marks
Thursday, March 3, 2011

In what may be a hopeful sign for a job market recovery, initial jobless claims fell to their lowest level in three years last week, beating analyst expectations.

The advance figure for initial unemployment claims fell 20,000 to reach 368,000, according to Department of Labor data released Thursday morning. Economists polled by Bloomberg before the release predicted a small rise to 395,000. The less volatile four-week average tumbled to 388,500.

Even Fox News had to report the good news…

Jobless Rate Dips to 8.9 Percent, Lowest in Nearly Two Years
Published March 04, 2011
FoxNews.com

The unemployment rate has been falling for three months, down from 9.8 percent in November. The jobless rate is now at the lowest point since April 2009.

House Speaker John Boehner called the numbers "welcome news," though he noted that the jobless rate is still "far above where the Obama administration promised it would be" when it pitched the stimulus package to the American people.

Here is my prediction, when the Republicans begin to cut back spending, you will see a rise in unemployment. Why? Because when you build roads or spaceships, that generates income for thousands of workers, who go out and buy goods and services. Those employees go out and buy more goods and services. There is a multiplication factor for every dollar spent by the government. The North Carolina Rural Economic Development Center wrote that “Each dollar spent on repair and maintenance construction [on roads] generates $1.20 in additional spending.” That is a 20% return on investment! When the Republicans cut spending on repairing the national highways system like they promised, those jobs will all go away and the jobless rate will climb again. When you give a tax break to a millionaire, they can only buy so many televisions and cars. When you give a person a job they can go out and buy a lot more televisions and cars and refrigerators.

This is called Keynesian economics or “priming the pump” theory,

In Keynes' theory, one person's spendings goes towards anothers earnings, and when that person spends her earnings she is, in effect, supporting anothers earnings. This circle continues on and helps support a normal functioning economy. When the Great Depression hit, people's natural reaction was to hoard their money. Under Keynes' theory this stopped the circular flow of money, keeping the economy at a standstill.

When the Republicans pull the plug on the pump, the economy is going to go back into a slump.