Actually… it still doesn’t make sense, does it. Highest GDP would result from more fiscal stimulus, so people must not think it’s important. (And polls suggest a lower bound to the number of people who think that taxes + spending would raise GDP but that the government should not take this course of action.)

And with high unemployment, the inherently inefficient government is tasked with ‘creating’ jobs or at least distributing welfare, with no inherent mechanisms to ensure this is done “efficiently”. So people must actually mean that they want productivity in the private sector to be as high as possible. Because in their opinion the government doesn’t actually “produce” anything, it just provides public services and funding to private/separate organizations that do the actual producing (like universities).

The optimum situation from their perspective, then, is that “private sector productivity is as high as possible, while the government only does the minimum for the unemployed that voters require it to do.” While government services and the additional spending that welfare allows may increase GDP, it doesn’t ‘count’ because if it did the government could just spend arbitrarily much and productivity would become meaningless as a measure of achievement.

If for example, people need more than the minimum income to be able to afford education, then jobs and poverty rates might become important to achieve high productivity and GDP, but in the final analysis it’s very possible that more education won’t help.
http://www.psmag.com/science/the-real-science-gap-16191/
http://www.scientificamerican.com/article.cfm?id=does-the-us-produce-too-m (earlier version of same article and slightly shorter)

On the other hand, if the government doesn’t give people welfare and they have to resort to illegal methods to sustain themselves or otherwise leads to negative effects, then ‘productivity’ and ‘GDP’ are not the sole goal but it [seems to be] up to society to decide whether any negative effects of high unemployment outweigh possible losses from a strategy to reduce unemployment; for example, people might feel emotional distress if the GDP of the US dropped below that of China.

We Could Be Near 7% But For…
http://jaredbernsteinblog.com/we-could-be-well-under-7-but-for/

Far as a debacle. Sorry. Those were the Bush years. We are just living in the aftermath. If you think this is a debacle then you will never vote Republican again.

Surplus to Depression. No way you can wipe that stain off the country.

I wonder if anyone has calculated the increased liabilities the PBGC has taken on (and the subsequent losses to pensioners who lost a major portion of their pensions) that resulted from Romney’s experiments with increasing “productivity?” These people assume a level of gullibility that would astound our grandparents and the news/entertainment business does nothing to stop them.

Couple of observations:

1. It relies on tax benefits of debt. If acquisition and post-acquisition debt weren’t deductible, the industry would not exist.
2. It makes a mockery of the idea that more money creates jobs and that more money, meaning lower taxes, is an effective incentive. Romney’s industry relied on squeezing companies to the margin of their existence and then claiming that focused them more clearly on what they needed to do. In Romney’s non-political world, companies lost their way with too much cash; they made dumb investments that needed to be dumped, over-expanded, etc. It was only the strictures imposed by debt that created necessary focus. This is nearly the exact opposite of the usual dogma that putting more money in pockets is more efficient. But I can’t expect logical consistency.

The laws to do that might have to be carefully arranged to get around the 13th Amendment, but the Supreme Court has already exempted the military draft and prison labor so I don’t think the problem is insuperable.

I would be very interested to hear your response to a critique by Duncan Foley in South Atlantic Quarterly of the Obama economic strategy that singles out Christina Romer’s and your projection of 8% unemployment in the absence of the 2009 stimulus.

The political debacle of Barack Obama’s administration in the United States reveals the dangers inherent in thinking of macroeconomic performance and policy in excessively narrow terms. Obama’s economic advisers tended to operate in a discourse in which the economy is the central concept. In this discourse the economy has its own laws and behavior, reflected in the movement of a statistical index—“real,” that is, inflation-corrected, gross domestic product (GDP)…

Obama’s economic advisers not only internalized these views but made the terrible political error of publicly proclaiming them, assuring the public that a recovery of the economy was inevitable and even venturing to quantify its dimensions, for example, in the prophecy that the US unemployment rate would, even in the absence of fiscal stimulus, peak at 8 percent.

One thing most politicians and economists have in common is they have never “been in the game” of business or done much in the real economy. Like sports writers, they sit on the sidelines and critique and criticism those who do the real work. (Sorry Jared)

We are faced with electing one of two lousy candidates. It will be another long four years.