Friday, October 2, 2009

It's Gonna Get Worse

Before it gets better.

WASHINGTON -- Employers eliminated more jobs than expected last month as the unemployment rate climbed to 9.8%, another sign that a rapid recovery in the labor market is unlikely.

Nonfarm payrolls declined by 263,000 in September, the Labor Department said Friday, noting that the largest job losses were in construction, manufacturing, retail trade and government. Economists surveyed by Dow Jones Newswires survey had expected a 175,000 decrease.

The unemployment rate, calculated using a survey of households as opposed to companies, grew 0.1 percentage point to 9.8%. Just last year, in July 2008 for example, the unemployment rate was under 6%.

Congress and the Fed can throw as much money as they want at the problem, a fundamentally unsound economy is a fundamentally unsound economy, and the only way to deal with it is to ride it out.

Paul Krugman is, of course, calling for even more deficit spending, but I ask to what end? It kills the value of our dollar (we should be facing a massive increase in purchasing power, but we aren't), increases our interest payments, and does nothing but prop up a crumbling economy. All in the name of 'helping people.'

It's throwing good money after bad, and it has to come to a stop. We are in for tough economic times, but if our government simply stays out of the way we will make it through and be better for it.

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