That is probably something the worst thing that can happen to this economy. No turning back. Right now, the government has to keep pushing the economy up this long and precipitous slope that seems never ending, but they cannot stop or afford to let the ball roll backwards. They have to resolve so many problems such as housing, education, healthcare and most importantly unemployment right now.
The people cannot afford to wait anymore because the longer someone is unemployed, the harder it is for him to get back to work. Simply because he is losing his skills and familiarity with the job exponentially.
Hiring from the government to reduce unemployment does not seem viable here either because unlike the past, machines now are doing the work at a faster and more efficient pace.
In addition, exports are at an all time low and possibly going to decline even further when the stimulus package is removed. Demand will drop as everyone back away into hibernation, hoping that there will be another festive event to boost sales, aside from the upcoming Christmas. Therefore, the manufacturing industry which is an all time favourite as a labour intensive industry does not need more people at the moment.
In the mean time, they can only create jobs by increasing government spending to encourage more infrastructures construction and the building of more facilities and houses. But this of course is not going to be sustainable in the long run. Prior to this, the labours can possible attend training sessions to beef up their skills and techniques so that they can meet these demands and orders from the government and subsequently improve their employability.
As we can see now, consumer demand is still rising and is pretty stable. However, we all know beneath this ostensible front, the government is panicking and freaking out. The consumer demand are stable solely because of the cash-for-clunkers program which helps push sales up and keep them from falling. For example, the consumers are only forking out 90% to pay for the product while the government is de facto paying 10% of it, this is most obvious in the automobile industry at the moment. Under such circumstances, they will naturally buy more in an attempt to stock up so that they can start saving up later on. In the worst case scenario, people will buy massively and stop buying altogether later on when the prices of the goods start to surge again.
Overall, this move is not at all sustainable and could possibly result in serious repercussions such as the collapse of the market and the plummeting of the export sales.
Credit -emergingspirit, -ning
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