Top Economist Says Unemployment Could Peak at 10.5 Percent
Top Economist Says Unemployment Could Peak at 10.5 Percent
Mark Zandi warns on “FOX News Sunday” that the recovery will continue to be “halting” and “fragile,” backing up estimates from other economists that show unemployment peaking next summer and hovering above 8 percent four years down the road.
October 11, 2009
Mark Zandi, co-founder of Moody’s Economy.com, warned on “FOX News Sunday” that the recovery will continue to be “halting” and “fragile,” backing up estimates from other economists that show unemployment peaking next summer and hovering above eight percent four years down the road.
New figures released last week showed unemployment rose to 9.8 percent in September, the highest since 1983.
But Zandi, one of the foremost economists cited by the Obama administration and Congress during the push for the $787 billion economic stimulus package in February, argued that despite the dismal economic predictions the recovery package was still a success and has prevented a massive problem from becoming even worse.
“10.5 percent is a very reasonable expectation for the peak in unemployment, but I think it would be measurably higher if not for the stimulus package,” Zandi said. “The stimulus in my view is working. It’s just gotten overwhelmed by the magnitude of the economic crisis.”
Zandi said the presumably slow recovery means stimulus benefits should be extended into 2010.
He said unemployment benefits, first-time home buyer credits and state aid should all be continued.
“If you’ve got 10 percent-plus unemployment, people are going to be out of work. They’re going to need more help,” he said.
(Excerpt) Read more at foxnews.com …
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Unemployment, both in the U.S. and the world as a whole, marches ever higher because the field of economics doesn’t account for the relationship between population density and per capita consumption.
Following the beating the field of economics took over the seeming failure of Malthus’ theory, economists adamantly refuse to ever again consider the effects of population growth. If they did, they might come to understand that once an optimum population density is breached, further over-crowding begins to erode per capita consumption and, consequently, per capita employment.
And these effects of an excessive population density are actually imported when a nation like the U.S. attempts to trade freely with other nations much more densely populated - nations like China, Japan, Germany, Korea and a host of others. The result is an automatic trade deficit and loss of jobs - tantamount to economic suicide.
Using 2006 data, an in-depth analysis reveals that, of our top twenty per capita trade deficits in manufactured goods (the trade deficit divided by the population of the country in question), eighteen are with nations much more densely populated than our own. Even more revealing, if the nations of the world are divided equally around the median population density, the U.S. had a trade surplus in manufactured goods of $17 billion with the half of nations below the median population density. With the half above the median, we had a $480 billion deficit!
If you‘re interested in learning more about this important new economic theory, then I invite you to visit either of my web sites at OpenWindowPublishingCo.com or PeteMurphy.wordpress.com where you can read the preface, join in the blog discussion and, of course, buy the book if you like. (It’s also available at Amazon.com.)
Pete Murphy
Author, “Five Short Blasts”