The job numbers released this morning showed private sector payrolls up 154,000. It takes about 125,000 new jobs per month to keep up with population growth. So in a sane world you’d take those 154,000 new private jobs, add on a few thousand public sector jobs, and you’d be on the road to recovery. Not the fastest, awesomest recovery in human history but definitely a real recovery in which the employed share of the population is steadily rising and where more employed people means more income means more sales, etc., etc., etc.
But we didn’t add a few thousand jobs to the public sector. Instead we once again lost tens of thousands of government jobs. Specifically, we lost 37,000 government jobs. That pushes the overall number to 117,000 total new jobs. Allowing for uncertainty about the estimates, that means we’re basically treading water. Things are neither getting better nor worse. And that’s because all year we’ve been perversely trying to massively cut state & local government payrolls in the middle of a huge labor market downturn.
Meanwhile, a report on yesterday’s crash:
Investors roared into Treasury bonds, cash and other low-risk assets on Thursday, acting on their fears about the weak global economic outlook on a day when stock markets in the United States declined more than 4 percent.
Now if everything had fallen because investors had all rushed into timber, we might have an unsolvable problem on our hands. The government can’t conjure up forests. But the government certain can conjure up US sovereign debt and good old fashioned dollars. If people want cash, then let them eat cash! Mint platinum coins and give them to states and municipalities who want to commit to avoiding layoffs. Mail them to random households so people can pay off their mortgages or buy more stuff.