The White House predicted modest growth in its annual economic forecast, warning that a revival of job growth may not bring a big decline in unemployment.
This prediction comes as part of a report which doesn't call for unemployment rates below 6% until 2016 -- six long years away. Nonetheless, it (probably foolishly) predicts "average job growth of 95,000 jobs per month" despite the fact that "the government's monthly job tally has yet to shift from negative to positive."
While high unemployment rates for several years to come seem like a realistic prediction, the idea that job growth will suddenly, mysteriously begin to occur is doubtful at best. In his recent episode of "Texas Straight Talk," Ron Paul explains that the Keynesian policies pursued by the federal government will only make the economy worse, not better as the White House implies.
"Continually increasing the debt is one of the logical outcomes of Keynesianism; more government spending is always [Keynesian's] answer," Paul comments, while noting that the federal debt limit shows no sign of budging from its "almost vertical" trend upwards. Moreover, the Keynesians in Washington who prescribe ever more spending to "fix" the economy (have they never heard of Hayek?) fail to realize the flaw in their reasoning: "There is never a good time to reign in government spending according to Keynesian economists and the proponents of big government. Free market Austrian economists, on the other hand, know that times are bad because of big government.