August 5, 2009 I wrote for the blog, "What are we going to do with all the unemployed"  I just re-read it and suggest all of you do so as well. 

Several themes noted then are the primary driving forces of today's job market - debt riddled governments unable to execute more failed Keynesian economic theories.  While in theory it makes intellectual sense that government spending in the private sector contractions should smooth the economic cycle.  Unfortunately, most Keynesian theories ASSUME that once the private sector economy is recovered the government will contract its presence and payoff the borrowed money, which acts as a natural drag on the economy, hopefully moderating the recovery and extending the period of sustainable economic growth.  We know conclusively that governments do not contract their presence or payoff debt.  So what happens when a government never contracts or payoff its debt?  When lenders will no longer lend, the government will implode. 

Domestic production of energy and frankly I don't care if it is Nuclear, Oil, Gas, Hydro, Solar, Wind, Coal is the quickest path to rebuilding America's balance sheet and put many Americans to work. Look who is standing in Americas way of domestic energy production, Wilderness Society, Sierra Club, Earth Justice, EPA (and many other Federal Agencies), President Obama.  Nobody is interested in the wholesale destruction of mother earth, but running few electrical transmission lines and natural gas pipelines is not going to kill her either. 

Think about the stimulus funds and ask what did we get for our money?  Did we get a smart grid where a bunch of Ohio steel workers go back to work? 

Nope, that blog from last year is as accurate today as it was then.  The U.S. economy was bloated on steroids for the past 15 years and it was at an unsustainable size.  The American economy still has contraction coming and I think it will be in local and state governments which will ripple through the private sector contracting it. 

When does it end?  When the economy reaches a maintenance level in a mostly unlevered state.

Europe is in the same boat as America and will have the same cure.  All of the developed worlds hopes rests with the expansion of  third world economies and improving their standards of living.