This WSJ editorial (below) paints an extremely dark picture for the long-term employment situation in the US. The last sentence of the article highlights the ineffectiveness of the stimulus program in creating jobs.
Schiller, Brad, 2011. Doing the math on a jobless recovery. The Wall Street Journal, Feb. 9.
From my own analysis, the article is correct in pointing out the severe situation that America faces regarding employment prospects for its workers.
Using the view of the White House that 250,000 new jobs will be created each month, full employment would not happen before 2018 according to Prof. Schiller's analysis.
Given these frightening projections, it is hard for me to envision an explosion in GDP growth given unemployment means restrained consumer spending, which makes up 70% of American GDP. The actions of the Fed via QE2 appear to be stimulating the US economy and equity markets, and perhaps accelerating inflation for energy and food in the US and in developing countries. However, the policy is not creating much in terms of job growth.
Folks need to think about the long-term aspects of the pegging policy for the Yuan, which is gradually making the employment situation in the US worse. Simply put, the Chinese government will not allow any appreciation of its currency fearing a loss of advantage for its economy. This is hurting America.
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