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How to Reduce Unemployment and the National Debt Simultaneously

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In Economics 101, we learn that there are three engines of spending and growth in a market economy: consumers, investors (business), and the government. All three of these engines are sputtering right now. Many American consumers are deep in debt. We cannot count on over-consumption to end the current recession. Businesses expand and invest when they believe they can make a profit. Profits are hard to come by in the depths of a recession.

Keynesian economics calls for the government to take up the slack and create jobs to pull us out of recessions, but having failed to pay down the national debt (the less enjoyable half of the Keynesian equation) while the economy was booming, the ability of the government to stimulate the economy is severely limited at the present time. The political will for further stimulus efforts is clearly absent. Many members of Congress and the public are concerned about adding to already massive deficits and the national debt.

If we want to end the current recession as soon as possible, avoid a “jobless recovery,” and construct a solid foundation for future growth in our economy, we are going to need a new approach. At the risk of appearing immodest, I believe I have devised a fourth engine of economic growth. Inspired by Benjamin Franklin’s adage that “Well done is better than well said,” I recently started spending less time writing and devoted a considerable amount of time and effort to forming a nonprofit organization (Workfare Incorporated) designed to address the problem of unemployment by putting Americans back to work with money raised through donations, benefits, and grants from private sources. It is essentially a private, non-profit version of New Deal-style jobs programs.

Workfare Incorporated provides ordinary citizens the means to create jobs and stimulate the economy without adding to our already massive national debt. In fact, Workfare’s success will reduce the federal government’s deficits and ease the financial pressure being felt by state and local governments. As Workfare puts more and more people to work on socially useful projects, the number of people relying on welfare and unemployment benefits will decrease and tax revenues will increase. In addition, the demand for the services of other charitable organizations (food pantries, homeless shelters, etc.) will be reduced to a more manageable level.

At this point Workfare Incorporated is little more than an idea. With the help of friends, family and some of my fellow musicians in the Kansas City area, I raised a few thousand dollars in start-up money by putting on a series of benefit concerts. About a fourth of money raised went to the Internal Revenue Service (they charge $750 to process an application for 501(c)3 status). A bit more has been spent on start-up costs: brochures, setting up a web site, etc. About a third of the money raised is in the bank, waiting to be joined by the much larger amounts of money that will be need to have a meaningful impact on unemployment.

I believe strongly in the idea of Workfare Incorporated. I will continue to devote time and energy to making the idea a reality. It is the most satisfying volunteer work I have ever done. I recognize, however, that only a broad base of generous support will make Workfare as successful as possible.

Our application for 501(c)3 status was approved in September. That means that donations to Workfare Incorporated are tax deductible. That will also make it a lot easier to get businesses to sponsor concerts and other benefits. I am in the process of recruiting my “dream team” for the Board of Directors and an Advisory Board.

The need for a new approach is clear. The stimulus bill passed earlier this year has saved or created some jobs, yet the unemployment rate continues to rise. Beyond the statistics, individual members of our society who are willing and able to work, but are unable to find a job, are suffering the pain and frustration of joblessness – relying on charities or the government to support themselves and their family. Many are facing and/or dealing with the loss of their homes, bankruptcy, and the loss of hope.

We can go on hoping for “change we can believe in” from the government. It may come — eventually. In the meantime, we need to act to change some things now. If enough people get involved with Workfare Incorporated, by making a donation, however small, by attending our benefits, or by simply helping to spread the word about Workfare Incorporated, we can begin putting Americans back to work.

For additional information about Workfare Incorporated, or to get involved, go to workfareinc.org.

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About Winston Apple

Winston Apple is the author of "Edutopia: A Manifesto for the Reform of Public Education." He is a former teacher. He has a Masters Degree in Curriculum and Instruction from the University of Missouri at Kansas City (1990). He is also a singer-songwriter and recording artist.
  • http://ruvysroost.blogspot.com Ruvy

    Winston,

    This is fantastic to read! One recommendation. Try and put some of the money you have raised in a fund of gold coins. At some point, your economy will flat-line, and efforts like yours will be the one of the few things to save you all. But if your money is in the bank, it will cease to exist. Gold, on the other hand, will retain its value and you will be able to fund programs on gold coins and parts of gold coins. You will have real money when everyone else is using stock certificates and hundred dollar notes for toilet paper.

  • STM

    The other option would be for Americans to get back to doing what they do best: making good stuff and selling it – creating jobs and wealth in the process.

    To do that, the profit-takers on the money markets would have to accept a fall in the value of the US dollar to realistic levels, or else no one will buy the stuff overseas because they can get it cheaper elsewhere.

    Don’t hold your breath, though.

    Wealth isn’t created for all by greedy men shuffling bits of paper or clicking a mouse on Wall Street.

    That’s a lesson we’ve all learned the hard way recently, but don’t expect anything to change too drastically anytime soon.

  • http://ralphanomics.blogspot.com/ Ralph Musgrave

    It is totally incorrect to suggest, as your 2nd para does, that Keynsian stimulatory policies are thwarted by a high national debt. Keynes made it perfectly clear that extra government spending can be financed by borrowing or by simply creating or printing extra money. As Keyes said in a letter to Roosevelt, “public authority must be called in aid to create additional current incomes through the expenditure of borrowed or printed money.” See 4th para.

    Milton Friedman said much the same: he set out a monetary policy in an American Economic Review article that involved NOT GOVERNMENT DEBT AT ALL.

    If you’re really interested in reducing the national debt (and it’s easily done).

  • Jim

    THE SOLUTION

    Everyone living in United States knows that our country is in trouble. We are headed towards civil unrest and rioting in the streets similar to what is happening in Greece and other areas of the world.

    It is almost as if there is a dooms day scenario about to unfold and our leaders are saying run up the deficit. Who cares what our National Debt is because the world is about to end and we will never have to pay it back.

    Let us put on our Nostradamus thinking caps! Imagine ourselves 100 years in the future looking back at the fall of the United States of America. What solutions will the Historians say that if we had implemented them could of saved us from destruction.

    I believe that in this mindset we can easily agree that the following need to be implemented immediately. Not one or some of these solutions but all.

    1) One flat rate tax of 20% for all purchases and services in the United States. Dismantle the IRS.

    2) Debit cards must be used for all purchases in the United States. This would insure that taxes are being paid and help regulate any year end tax rebates.

    3) For every dollar spent for any new product made in the United States the purchaser would receive a 10 cent rebate at the end of the year. This would create American jobs.

    4) Any terminally diagnosed person would have an option to receive a one lump sum payment of $45,000 to go home and die with dignity as opposed to low quality life extension in a hospital at a huge cost to society. This money could be used for a spouse or to help put someone in the family thru college.

    5) Legalize all drugs. Regulate this industry. This would get rid of the drug cartels and eliminate all the senseless drug related murders. For forty years the United States has been at War with Drugs and we are still loosing. Do not condone drug usage just regulate it.

    Jim Burns
    You Tube mynation123