In a very weak economy, when you say 'cut government spending,' what you mean is you're laying off school teachers and you're de-funding various programs that put money into the economy. This means you have more unemployed people that then draw unemployment benefits and don't pay taxes.
Interpretation
Cutting government spending in a weak economy leads to higher unemployment and less overall economic support.
Fareed Zakaria highlights the paradox of cutting government spending during economic downturns. While such cuts are often seen as an attempt to balance budgets, they can result in greater unemployment and a contraction of economic activity, as essential services are removed and those affected by layoffs become reliant on unemployment benefits, thus exacerbating the very financial challenges the cuts intended to address.
In practice
This quote can be used in discussions about fiscal policy at a public forum.
But now, we are becoming suspicious of the very things we have long celebrated - free markets, trade, immigration, and technological change. And all this is happening when the tide is going our way. Just as the world is opening up, America is closing down.
It is likely that human beings will find fulfillment and will be rewarded for the same qualities that they have been rewarded for for 5,000 years. And that is intelligence, hard work, honesty, a sense of character, loyalty to family and friends, and above all, love and faith. If you are trying to decide what you should do, those are the things you should do. And you know it.
The Berlin Wall wasn't the only barrier to fall after the collapse of the Soviet Union and the end of the Cold War. Traditional barriers to the flow of money, trade, people and ideas also fell.
If you listen to the political discourse in America today, you would think that all our problems have been caused by the Mexicans of the Chinese or the Muslims. The reality is that we have caused our own problems. Whatever has happened has been caused by isolating ourselves or blaming others.
In the 1990s, we were certain that Saddam Hussein had a nuclear arsenal. In fact, his factories could barely make soap.
But as the arms-control scholar Thomas Schelling once noted, two things are very expensive in international life: promises when they succeed and threats when they fail.
The only way that has ever been discovered to have a lot of people cooperate together voluntarily is through the free market. And that's why it's so essential to preserving individual freedom.
The problem is this. The spread of markets outpaces the ability of societies and their political systems to adjust to them, let alone to guide the course they take
Economists specialize in pointing out unpleasant trade-offs - a skill that is on full display in the health care debate. We want patients to receive the best care available. We also want consumers to pay less. And we don't want to bankrupt the government or private insurers. Something must give.
There is no easy fix or youth unemployment. Partnership between the public and private sectors can make a big difference.
Living capital, which has the special capacity to continuously regenerate itself, is ultimately the source of all real wealth. To destroy it for money, a simple number with no intrinsic value, is an act of collective insanity - which makes capitalism a mental, as well as physical pathology.
I know firsthand that many employers who comply with other labor standards still hire the undocumented. Many businesses pay the minimum wage and have barely tolerable working conditions because there are sufficient undocumented workers willing to accept those terms. If we care about low-income workers in this country, we need to create pressure to improve their economic condition by reducing the supply of unauthorized workers.
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