Recovery largely rests on Debt Relief

No, not government debt, but private household debt. The enormous run-up in private debt that both contributed to the housing bubble and was an effect of the housing bubble is now holding us back from recovery. Households are trying to pay down debt through 'saving' more of their income, but in the aggregate are unable to because of unemployment and the 'paradox of thrift'.

In order for consumers to pick up spending again, they first need an income, and they second need reduced debts. Since the debt run-up was largely fraudulent (on both sides but I hold the creditors more culpable because of their understanding that the loans wouldn't be paid back and that the gov't would subsequently bail them out) I am in favor of some form of debt-forgiveness.

If we do not forgive large amounts of household debt, our recovery may never come. Job creation relies on sales which rely on consumer spending which relies on lower household debt which relies on income which relies on jobs. How can you enter the circle? The gov't can write down large amounts of debt and guarantee a job to all willing and able to work. These policies would, I think, ensure a swift recovery.

Read here for more on debt forgiveness.

Recovery or Double-Dip?

It's still amazing how economists and politicians keep predicting a recovery, in the face of overwhelming evidence that indicates otherwise.

June swoon: Economy added almost no jobs last month

It's hard to understand why this news still "comes as a shock" to economists. They continue to ignore the explanation of modern money and government finance given repeatedly by MMT'ers.

I posted just a few weeks ago about the likelihood of a double-dip recession, or at the very least a lack of recovery given the lack of overall demand and spending. And since the government shows no signs of backing off its austerity push, I stand behind my belief that the economy will continue to remain quite stagnant with little to no gains, and quite possibly more losses, in the job market.

The government isn't crowding out private spending, which I would say will be obvious to everyone when cuts in government spending don't bring about the growth in jobs politicians say will happen, but I'm not sure they will get that message. Instead, they might call for even more cuts! Oye!