Write my unemployment essayGovernmental intrusion into a natural economic cycle may look like a threat to the economic stability. Capitalism boosts competition between small businesses, and that is how a free market economy works. Theoretically, free markets promote a sustainable growth of 2-3% that can create about 150,000 jobs monthly. But the real market conditions may differ dramatically. Bubbles and busts of the business cycle may create new jobs and swipe them as fast, which is not the growth we need. To assure a greater stability, the government shall regulate business environment with effective fiscal and monetary policies.
The easiest way to create new jobs is to launch expansionary monetary policy. It increases the money supply and reduces taxes allowing consumers to take cheaper credits and businesses to expand. The Federal Reserve can also apply quantitative easing for borrowers and lower the rate on the discount window. These measures are effective only before the recession.
Government spending is a sure way to create new jobs, but not all spending is equally efficient. According to the University of Massachusetts, construction of roads, bridges, and other basic infrastructure can create maximum jobs. Unemployment benefits also help to create a maximum of new jobs. If the unemployed have some money to spend, the economy always wins.
Payroll tax cuts also allow consumers to spend more money. It allows either to reduce prices or to increase wages for employees. Companies can also buy more supplies or hire more workers. Economists argue that a payroll tax cut given to new employees can create almost as many new jobs as the unemployment benefits.