My thoughts
BUMP! I like the idea.
I'm a dittohead as far as the time frames. 1990's to prevent the bubble forming in the US. No repeal of Glass/Steagall AND no expansion of HELOC's.
We forgot in all the hoopla over 9/11 what a sorry state the US economy was in at the turn of the century when the tech bubble burst. We just limped away from that mess when "W" decided invading Iraq was a good idea in 2002.
Modern "wars" are money pits. They don't need millions in uniform to staff the ranks or large numbers of gear (tanks, airplanes, ships) that tons of people can be employed in semi-skilled labor to make as in WWII.
Sure, military contractors have been raping the Treasury blind for support services the military did cheaper and better all-in-house (and employing a fair number of people at good wages, mostly foreigners, though), grossly inflating costs-per-boot in theater, but I digress. Wars aren't going to put us all to work is all I'm saying.
IIRC Maastricht was very heavily picketed and controversial at the time. Formation of the EU was as much an expression of euphoria over the passing of the USSR as it was a stage in nearly-inevitable economic integration from this Yank's perspective.
One of the biggest issues of joining the EU was getting one's economic house in order, mostly reducing public debt to a target % of GDP. The big problems with the PIGS is that they were in a chicken-or-the-egg quandary themselves. Spend on economic development or pay down public debt? Paying down public debt under IMF restrictions has had a fabulous record of exploding poverty rates, stagnant economic growth, etc. Ireland especially hoped it would grow its way out of the mess and pay later (not to mention encouraging a yeasty speculative RE boom) and fell downstairs when it didn't. Greece, Spain, and Portugal were poor relations to begin with and hoping to get economic aid from Germany and France, but Germany had its spare cash tied up in absorbing the GDR, not investing in getting Spain, Portugal, or Greece into economic shape.
As to what could address the Great Recession NOW:
I remember a Depression-era cartoon where a fire truck's hosing money over the burned-out shell of a building and that's what Keynesian stimulus
can do in the modern economy.
Several things need to be addressed in the modern economy:
- Clearing the excess housing stock is paramount to stopping the free-fall in property values. Do what they did in the 80's with RTC- pick a floor value, auction 'em off, and have a chunk of properties that could become low/mid-income housing. Make them purchasable via sweat equity so they're not a free gift but something earned and cared for.
- Infrastructure is both over-and underfunded, due to the disproportionate voting power of low population-density states when in line for federal stimulus cash. Also, on the coasts, the media's far more eager to muckrake on boondoggles like the Big Dig in Boston and various other projects that were borne of necessity, political haggling, complex liability and environmental issues, etc.
- The current commercial model for evaluating people for creditworthiness is FUBAR. Between the problems with identity theft, garbage input from fraudulent collection agencies pursuing zombie debts on spec, people having to be more mobile in both domicile and career, and usurious interest rates leveraging yourself out of poverty via credit is nearly impossible.
- The job "market" is a freaking mess for everyone, young or old. Employers have become insistent on people already being fully-trained, 3-5 yrs experienced and qualified for the job from day one so they don't have to pay training costs for more than basic orientation. YMMV but the expectations of productivity have become so high that companies feel nobody can afford to learn on the job which creates a chicken -or-the-egg quandary for a lot of specialized jobs that pay decently. Jobs go unfilled b/c nobody's "qualified", unemployment's high b/c it costs companies too much to hire people unless they'll be top performers right out of the box,and IMO, everyone loses.
- Health care costs are a tremendous drain on the rest of the economy. It offers benefits, people living routinely to 70-80, However, the medical support to get there from age 40 on and esp last six mos of life is where 80-90% of health care costs are incurred. How to pay for that is something nobody in the private or public sector seems willing to tackle head-on considering the wave of Boomers hitting the high-usage years of health-care.
- Education, especially tertiary education, has become so insanely expensive (and financed w/o any real assessment of increased value, esp for the first two years of undergrad) that it makes me weep. I love intellectual endeavors, but undergraduate studies are about learning to think and innovate as much as going to typewriting school will make you a great author. It's gussied up training. Nothing wrong with training, but be clear about what you're about and work on doing it well without breaking the bank making me and millions of others debt slaves for a decade-plus just for an oversold certificate of completion.
I'm sick and tired of a huge chunk of university resources diverted to a bunch of semi-pro athletes as a publicity/"fundraising" gimmick. There's a large chunk of student athletes (esp in the non-football sports) that actually take their studies seriously but award them a scholarship based on academic merit but quit using sports as the excuse for it.
So, to sum up, here's where the government can prime the pump as it were.
- Get the foreclosure mess wrapped up ASAP as fairly and efficiently as possible, put as many folks into the homes as you can who will live there a while and maintain the property.
- Find ways to match jobs with candidates and ease folks into the seats with training programs, vouchers for health benefits, child-care benefits, etc so the out-of-pocket costs for employers to hire and keep people aren't too harsh. Trash the Medicaid income limits and make them benefits even middle-class people can enjoy and DEFEND. Make campaigns emphasizing lean-and-mean headcounts cause too much job stress and turnover and do whatever it takes for CEO culture to hit the dustbin of history.
- IOW Job Corps needs to be expanded from age 17-24 to pretty much the whole working age range to retrain people and KEEP retraining people every decade or so. If all you need to do is relocate and can't sell your house, Job Corps will front the costs to get you into another domicile. Would you rather give folks 5K to go where they'll be gainfully employed or keep paying UI for 99 weeks? You can tie it to government service if you want or not. The need's definitely there. Putting the $$$ we're already spending to work in better ways that actually improve folks' lives and benefiting the economy as well.