Frum's Economic Prescription

April 10th, 2012

In the wake of last month's much discussed jobs report, David Frum has some interesting ideas:

"To do better, we'll need a program to stimulate employment for the long-term unemployed -- including potentially a New Deal-style requirement that nobody receive benefits without working. It's no good to anybody -- the unemployed least of all -- to allow the unemployed to collect two years' worth of benefits while waiting at home, their skills atrophying, their resumes going stale.

To do better, we may need to induce employers to create jobs, not only through tax cuts but through direct subsidies, including subsidies of the cost of health coverage. (Especially for older workers, health costs can be more of a deterrent to hiring even than the cost of wages.)

We will need to curtail the generosity of Medicare to open fiscal room for government programs to support opportunities for the young.

We will need a permissive monetary policy that accepts moderate inflation to reduce the burden of mortgages and other debts -- even if it bites a little into savings and fixed incomes.

We'll need above all to recognize the magnitude of the social distress we still face, even as the economic statistics tell us of a recovery that moves financial markets and presidential polls -- but that threatens to bypass tens of millions of Americans for months and years."