When the National Bureau of Economic Research proclaimed that the recession is over, not many people believed them.  After all, unemployment still stands at levels we haven’t seen for many years – and very few businesses predict they will do much hiring in the near future.  But looking only at GDP (the sum of all goods and services made in the economy) it appears that somewhere around June 2009 we started having positive economic growth.

That’s great, as far as it goes, but what does it take to create jobs?  Running a little regression or two can give you a few potential answers – and none of them look all that good right now.

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The US government and Federal Reserve has pumped about $4.7 trillion into the economy to get it moving again.  That’s about one third of the total annual gross domestic product, or what the entire nation produces in a year.  If you don’t think it seems to have done as much as it should have, you’re far from alone. Why this traditional stimulus has failed to kick-start the economy has been at the heart of many policy debates over this summer as we contemplate what comes next.  The central problem, however, is that we have been treating the situation as just another recession and not something very different– despite obvious signs.

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There is little doubt that the economy needs some kind of breakthrough in order to get moving again.  Official readings tell us that the recession is over, but with unemployment remaining high very few people believe it. There is one simple and very direct solution to kick-start job creation if the Federal government is willing to take drastic action – which I think is essential.  That would involved making people close to retirement age eligible for Social Security and allow them to tap their retirement funds ahead of schedule, freeing up jobs in the private sector for a new generation of workers.

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