An Analysis of Paul Krugman's Argument

A loss of employment could affect an individual because they then have a reduction in income and possibly not afford to keep payments on the mortgage therefore losing the family home. The financial strain could also mean less money is being spent on basic needs such as food, affecting the individuals physical well being, Emotionally the individual could suffer from a low self esteem, lack of confidence and a depreciating value of self worth. It could also lead to high levels of anxiety wondering when another job will come up. Additionally this could lead to stress and cause problems within close family relationships. These effects could be magnified if it is the main bread winner in the family who has lost their job.

In any economy, no matter whether it is controlled by the government or by free markets, people need to work in order to support it. The government does not generate tax revenue by magic. There have to be people in that economy earning an income to ensure that the government continues to collect taxes. In a free market economy, the same applies because there are some services which only an organized government can supply (such as protection from extra-national threats), but there also those which the people get for themselves because of the working of the markets. In any scenario, unemployment is, at the very least, a drag on the economy, and it can be much worse. This paper examines how the unemployment rate in the United States is underreported, and how that fact effects the sluggishness of the present economy.

In 2011, the rate of unemployment is at 9%. Although there is a decline it has been rather slow. Financial analysts predict that unemployment rate would drop to 8%. Even for the people who still have their jobs the hours that they work have been reduced since then. With reduced hours the productivity of the workers would not be fully exploited which in the end, affects the economy. This is so because with a small fiscal base the economy has not been able to recover from recession fast enough. Although there have been positive growths in the employment rates these growths are barely enough. They do little to help in the dire situation. This only means that joblessness is something that the population would have learned to live with.

Krugman starts off his essay by painting the picture of his younger days in a rather fair and middle-class American society. The theme of his writing is centered around policies with the power to reverse the extreme economic imbalance the United States has been challenged with. The excessively divided American economy contradicts the basis of America’s birth: “Ever since America’s founding, our idea of ourselves has been that of a nation without sharp class distinctions- not a leveled society of perfect equality, but one in which the gap between the economic elite and the typical citizen isn’t an unbridgeable chasm” (Graff, Birkenstein,

In the United States, we encounter quite a bit of obstacles that we can’t seem to get rid of completely. We as a nation deal with inflation, unemployment, stagflation, recessions, depressions, and so much more. Reading these three articles opened my eyes to the world of economics, and even made me question the society we live in. I’ve learned that sometimes questions can’t be answered, and I learned that once we solve one issue, there is always another issue on its way. These articles made me analyze, and think about the future of economics, and what I can do to try and help the economy. These authors of these three articles make it very clear that there are issues in the United States, and they do an amazing job

A nation’s economy plays a vital role in how a nation operates. The United States economy faces a large variety of problems in this paper; we will focus on 4 major economic problems, unemployment, inequality, federal debt, and the financial/credit market. All four issues are interconnected in some way with deep social and economic implications. These issues were emphasized during the Great Recession that hit the U.S. economy in 2007.In the following paper, we will look at each of the four topics individually as well as look at how each plays a significant role in one another’s overall impact on the U.S. economy as well as individuals in the United States. The United States plays a crucial role in the world economy, meaning that every issue and difficulty faced the United States economy has implications far outside the U.S., understanding how these issues relate to one another sheds insight into just how connected every area of the economy actually is.

Together, they made around $83,000 and had around $90,000 in assets which placed them solidly in the middle class. Twelve years later, Allison and David experienced setbacks but increased their income to about $125,000. Their financial assets quadrupled to a whopping $368,000 and saved up thousands of dollars for retirement. However, with the economy downsizing on the heels of the Great Recession and uneven job recovery heavily tilted toward low-wage jobs, David joined millions of other Americans in unemployment. Having spent half a year unemployed, David returned to work working at a significantly lower wage. Over the course of 12 years, David witnessed how work became less stable and more contingent for many Americans. The working experience illustrates a larger transformation in America’s employment landscape, away from middle-class jobs and jobs with significant benefits toward low-paying jobs with few benefits, accelerated by the Great Recession.

As the United States sled into a great economic depression in the early 2000’s, the people of this country grew desperate and in need of government assistance. As with any economic downfall the unemployment rate grew to a staggering high. Most families were despondent to stay afloat the poverty line on whatever means possible. But what are the effects of continuously throwing money at people even when the economy bounces back? In an editorial recognizing these effects, “Welfare Dependency Destroying America,” John Mariotti, an advisor to and president of many successful companies explains why giving handouts aren’t always a positive matter.

Paul Krugman, author of “The Death of Horatio Alger,” evaluates the declining social mobility in America. He proposes that the decline in social mobility is causing the rich to continue to get richer and the poor to continue to get poorer. Krugman was inspired to discuss how this would result in the shocking loss of the American Dream, after he read a Business Week article that made him fearful of the considerable and drastic decline that would destroy the livelihood of many Americans. Krugman’s purpose was to make his audience; those of lower socioeconomic status, aware that the American Dream they hoped to achieve would soon become extinct. He creates a fearful and negative tone, in order to grab his audience's attention and inform them about the economic downfall. Krugman strongly conveys his message not only through his harsh tone, but by appealing to pathos, incorporating rhetorical questions that create a fearful mood, and appealing to logos to make a credible and sound argument.

Three million people lost their jobs, especially in larger cities (Norton, 14-6b). Debtors and the unemployed pursued easy-money policies to offshoot expansion due to the need of money. Businessmen defended property rights and demanded “sound money” policies only widening the gap between farmers and workers and wealthy industrialists (Norton, 14-6b).

In the U.S., the primary source of income comes from jobs. However, people are unable to find jobs because businesses are outsourcing unskilled labor to developing countries since workers there are willing to be paid less than the average American worker. This creates problems for people who are trying to look for jobs because many lack the skills to function in a job that requires skill and will remain jobless until they find unskilled labor jobs. Since the Recession, working class families who had lost their jobs are struggling to survive due to the little job availability (Heritage Foundation, 2011). Because the majority of working class families are suffering from prolonged

In the midst of the current economic downturn, dubbed the “Great Recession”, it is natural to look for one, singular entity or person to blame. Managers of large banks, professional investors and federal regulators have all been named as potential creators of the recession, with varying degrees of guilt. No matter who is to blame, the fallout from the mistakes that were made that led to the current crisis is clear. According to the Bureau of Labor Statistics, the current unemployment rate is 9.7%, with 9.3 million Americans out of work (Bureau of Labor Statistics). Compared to a normal economic rate of two or three percent, it is clear that the decisions of one group of people have had a profound affect on the lives of millions of

Mills continues about the unemployed individual, '...but when in a nation of 50 million employees, 15 million men are unemployed, that is an issue, and we may not hope to find its solution within the range of opportunities open to any one individual'. (Mills 1959: 9)

Unfortunately, much of America did not heed Krugman’s warnings when his first book was released in 1999 because America was still rising high. Technology and the top businesses of the day were just starting and booming very fast and smoothly. While technology and internet giants such as Google were growing, the United States’ government’s budget surplus was also increasing. Yet, our government departments--Federal Research and Congress still insisted that capitalism should be a free market--that it will save itself, that regulating credit default swaps was unnecessary. Americans were overconfident with their past successes and forgot to look to other countries as models. Now, lasseiz-faire has turned around to bite America in the butt.

He laments the loss of thousands of jobs and foretells of an economic collapse as jobs grow stagnant. Berman predicted, correctly, that low skilled jobs would never return in demand, and that the economic security of all low skilled workers was at risk. And that high skilled jobs would become the new standard. We are rapidly approaching a time in which an average worker is an unemployed worker. A vast array of skillsets and creativity will become the new base requirements for even the most minimalistic of