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Fernando Jiménez

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What can a country do when his unemployment rate reaches the 27%?

Spain has reached the 27% of unemployment rate, the goberment have done importante modifications in the work market, made it more flexible, added to others legal regulations, but nothing seem to be effective.

What should do we do to stimulate our work market?

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  • May 7 2013: May I have one suggestion explained below.
    To borrow more money by issuing government bond to be used to stimulate the economy is a no-no.. But you must increase the PRODUCTIVITY AND CONSUMPTION TO JACK UP THE BUSINESSES AND MANUFACTURING IN ORDER TO INCREASE THE EMPLOYMENT. To do that you may use the tactics by Argentinian President Mrs. Kirchner by borrowing from the workers (including the government workers) to invest in new or expansion of manufacturers or businesses which will reduce the imports of goods from other countries because of the loss of competition from foreign countries.
    The procedure of the "borrow and invest" should be different than the Argentinian government by raiding the money, gut rather exchange the reserve for the pension funds to convert directly or indirectly ito be the equivalent of the shares of stocks in the expanding or new industries. Any dividend yields will be paid to the pension plan or to the individual shareholders (workers). The government will manage the expansion or establishing the new industries/ businesses and training the unemployed to fill the needs of the new/expanded production. This scheme will eventually increase the consumption thus stimulate the economy as a whole. It is also a better strategy than higher taxes. But to make sure the new industries will survive the international competition, the wage scale and the retirement benefit must be modified similar to the austerity measures. But the suffering should be more tolerable because there would be less unemployment with a somewhat better economic conditions.
    This is very similar to a negotiated pact between an industrial company and its workers by letting the workers being the shareholders as well, only the "management would be the goverment for the whole set up.

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