Thursday, August 11, 2011

doing exactly the wrong thing

Yglesias notes that the real interest rates on government debt have become negative. A sane government would borrow a metric f**kton of cash right now and use it to put people to work, and put off dealing with the deficit until unemployment is under control.

The perniciousness of prolonged high unemployment rates is grossly underestimated by our political class, presumably because they never suffer it. People who are out of work for more than 6 months (and their families!) suffer for it monetarily, but also psychologically, and the damage in both cases more or less permanent. Entire generations bear the economic and emotional scars of hardship, as noted in this great article at The Atlantic.

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