In the news today

[Carnage]

If you are complaining about the bailouts, you are ignorant. They weren't free money. They were loans, and the government has already recovered most of it, ahead of schedule.

If the government had not loaned the banks money, the banks would have defaulted on trillions of dollars of debt, which would have set off a massive economic catastrophe of unparalleled proportions.

While you are correct in that the bailout was necessary, and we would have had a COMPLETE financial collapse had the loans not been given out, the problem here isnt that the money itself was lent out to the banks. The Fed did the right thing to prevent another Great Depression.

The problem is that:

1.) The fact in itself the Banks WERE too big to fail.
2.) Many bankers responsible were allowed to keep their jobs, and were given the chance to pay back their loans. What frustrates Americans is that the average person is not given this opportunity to pay back debts at near 0% interest rates. The majority of the country has to suffer under crushing debt. The moral/fair course of action would have been to nationalize the banks and fire the heads responsible.

Don't mistake the causes of the crash with the cause of our economic decline. They are completely different things. Most importantly, America is in an economic decline because of demographics: middle aged and old people are about to retire in massive numbers. That would have caused inflation, since they would have all pulled their savings out of the capital markets at roughly the same time. An economic "crisis", like the crash of 2009 merely accelerates the process of demographic withdrawal of funds. Don't believe me? Consider that 60% of Americans were in the labor force in 2008, and that a third of them were due to retire in the next 10 years. That means that 40% of America would have to perform the labor that 60% of America used to -- that means that every American in the labor pool would have to do the work of 1.33 people so that we could all maintain our standard of living. A 33% increase in necessary effort, just to stand still!

The crash IS the cause of our massive unemployment. Demographics isnt a cause for demographic decline in this country (unlike China's current predicament). The matter of fact is that unemployment is worst for young people; if old people begin to retire, then that will be great news for the younger as well as rising work force. The retiring workforce would be replaced by an even larger workforce by your theory. We wont have to do the work of 1.33 people because we already have such stark unemployment, millions of people would love to pick up the slap. Work per person wouldnt decrease.

The reason it will be tough to go back to 3-5% unemployment is a combination decades of our tariff policies, the fact that we've become a service sector economy, and the fact that income is ridiculously unevenly distributed.

1.) Low tariffs and service economy are tied together: We have become a service sector economy, and with the crash and improving technology, we've suddenly realized that we dont need all so many people providing services when growth is no longer 3% per year. As for increasing manufacturing employment: since labor is so cheap in Asia, Latin America, and Africa, there is no way we will ever secure those manufacturing jobs back from them without either giving immense incentives to our businesses for hiring here or raising our tariffs so that it becomes a complete disadvantage for businesses to hire elsewhere. The problem for giving incentives is as I said, they would likely have to be extremely large. How is a $7 minimum wage going to compete with a $0.50 wage? Im pulling $0.50 out of my ass I'll admit, but do you honestly believe sweatshop kids are pulling dollars per hour? And if we increase tariffs, other countries may raise theirs in response, and import prices will rice. Not only that, but if it costs more to produce when paying workers higher wages, then product prices will rise dramatically, either raising the cost of living or foregoing extreme inflation. All this unless the business owner decides to take a hit for the team and pay the difference in wages out of his own pocket, rather than raising product prices to compensate for higher wages. Which brings me to my next point:

2.) The disparity in income between the top 1% and bottom 99% have distorted demand and supply, as well as standards of living. When millionaires and billionaires hold the vast majority of wealth, dont pump that money into our economy but others, and rig debts/the system so that they retain most of the economic output, very little money will trickle down to the masses. Since the the majority of the country no longer has enough jobs or pay to spend leisurely on products, this curbs growth and demand. The government cant provide jobs because it doesnt have the revenues: Again, mostly because the wealthy pay lower tax rates while retaining most of the wealth. At the same time, large government spending in more services like medicine and social security dont help our employment situation too much, when that money could be used to be putting people to work or giving them sufficient education to provide more service sector jobs both locally and globally.

If you want to blame anybody, blame your grandparents for having too many kids, and your parents for not having enough to support them.

I will agree with this to the extent that people who could not afford kids should not have had them or many in the first place, and that slowing down the population growth will help employment since we will no longer have manufacturing jobs, and there arent enough service sector jobs to go around.