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.
Article comments
1 - 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.
2 - 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.