The unemployment numbers don’t tell the whole story:
Brad DeLong offers some further context for the jobs numbers, observing that “And U-6–unemployed plus discouraged workers plus unable to fond a full-time job–is now at 13.5% of the labor force–and BLS ‘discouraged workers’ are a big undercount of the concept.” With so many able-bodied, working age people not actually working, we’re producing many fewer goods and services than we have the capacity to produce.
I know the free market types are goiing to say that “if we just let the market do it’s job we would be fine” although to me it looks like the market has spoken and without easy credit people don’t want a bunch of marginally useful consumer goods. Even things like cars are probably not going to be replaced every few years.
Maybe their is something else at work here, like we are starting to reach a level of population that we cannot support, or support in the style that most people have become accustomed too.
Hmmm, food, clothing, and shelter are available to people like never before for less than ever before. Why would populations decrease? I mean, even if the price of Viagara is inflationary due to government subsidies?
We can probably continue to grow our population at a subsistence level, but in terms of maintaining a middle class population that may be more difficult. The choice might be small population of relatively affluent people or a large population of people who barely get by.