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Output gaps and unemployment

JP Hochbaum

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Most business owners try to find more customers, and attract more customers. They would never try to reduce their customer base, and that is exactly what the government does when they tax or reduce spending. One side of the political aisle wants to reduce spending, which causes higher unemployment, and the other side wants to increase taxes (forced health care purchases), which will also increase unemployment (outside of the health care sector). Both sides have it wrong, we should be reducing taxes, by eliminating FICA and increasing spending, via a jobs bill and/or single payer health care. This is how unemployment is reduced and how to allow the private sector to run at full steam.

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Output gaps and unemployment. | Heretical Druthers
 
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