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Thursday, November 01, 2012

'Why Should Government Respond Differently to Natural vs. Economic Disasters?'

Speaking of (the lack of) fiscal policy to address problems like long-term unemployment:

Why Should Government Respond Differently to Natural vs. Economic Disasters?, by David Callahan, American Prospect: ...Natural disasters are often highpoint moments for the public sector, reminding us of the power of common institutions that allow citizens to help each other in times of need. The residents, say, of sunny Los Angeles needn't do anything special at this moment, because they have already been doing something—helping fund FEMA with their tax dollars so that it has the capacity to respond...
But here's a question: If most of us take for granted that we should be there for our fellow citizens during natural disasters, using the tool of government, why is it so controversial that we should also lend a helping hand during man-made economic disasters? Why are unemployment benefits under attack in numerous states, even as millions remain jobless through no fault of their own? Why is an idea as obvious as a direct government jobs program off the table in Washington?
The answer is no great mystery: Critics of a government safety net tend to think that individuals will solve their own economic problems...
Even if you believe that individual willpower matters a lot, as I do, it's naive to imagine that individuals can do much in the face of large-scale economic downturns driven by structural factors that are national  and even global in scope. ... Meanwhile, charity will simply never have enough resources to provide a decent safety net...
In the wake of Hurricane Sandy, you won't hear public officials ... saying that devastated towns should pull themselves up by their bootstraps. No one thinks that government should walk away with the recovery job only half done.
Likewise, we should never walk away from the victims of man-made economic disasters when they are still suffering acutely. Yet that is what existing public policy is doing right now. ...

    Posted by on Thursday, November 1, 2012 at 10:27 AM in Economics, Fiscal Policy | Permalink  Comments (30)


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