||State owned enterprise subsidies weigh down the entire business cycle.
According to a study by the University of Oregon, subsidies from the federal government to state and local governments make up only 0.8 percent of economic activity. This leaves an astounding 14.2 percent of U.S. economy вЂ“ including state, local and commercial subsidies вЂ“ that goes unreported or unaccounted for.
This analysis of the total economic impact of public sector subsidies reveals that at a certain point, subsidies begin to reduce private sector economic growth in the aggregate. When the private sector has enough incentive to invest to create its own jobs, then jobs will come into the private sector without subsidy. This happens when private entrepreneurs have enough economic incentive to create jobs.
While federal policy cannot be the driver of all economic growth, it can make a significant difference. In 2008 alone, private sector economic growth grew 6.8 percent, the highest level on record, despite a $3.6 trillion federal deficit.
On balance, the nation's federal spending вЂ“ which includes the spending that benefits U.S. citizens from public employment programs that are created by the federal government вЂ“ has contributed to the growth of the entire economy. It provides a crucial incentive to grow the economy, as well as provide a healthy safety net for businesses.
That is why, when we look back at history, we see that government spending was not the only factor that was responsible for the success of the New Deal. Public investment did provide the impetus for economic growth. Private investment, once it is created and financed, will also provide the opportunity for growth. In doing so, public investment helps bring about the long-term growth needed to achieve the American Dream.
As the United States continues to recover from the Great Recession, there is no doubt that the federal government must have the resources to invest in infrastructure that will improve our economy. By reducing government's dependence on public subsidies, a nation like ours can be more competitive and keep the American Dream alive.
Dorrian S. Deacon is the president of the U.S. Institute for International Cooperation and Director of the Washington, D.C.-based Public Policy Center (PPCI).
Manufacturing slump points to unemployment increase for all workers as employers say job cuts are inevitable
The Office for National Statistics said that total employment was estimated at 43.4 million in November 2015. That was down 1,000 from the previous month, but still the highest level since May 2010.
The overall unemployment rate remained at 6.3%, which was also unchanged from the previous month.
But there was a widening gap between the employment of those with a university degree and the rest, with one in five people with a university degree unemployed вЂ“ up from just one in 10. The ratio was 1.6 for those with a postgraduate degree.
The drop in employment to people without a degree was not due to any major changes in the composition of the workforce, with the proportion of people in management jobs remaining at around 75% of its level in March, according to the ONS.
The unemployment rate fell to 5.4% in the manufacturing sector, a sharp drop from the previous month and a rise of 3% from December and January.
Some employers are already struggling to fill jobs and as the number of people without a university degree falls, it is likely they will start cutting pay too, said Mark Thompson, deputy director at research company The Economist.
"Even if this is just a matter of reducing the number of people with jobs, the problem for employers is it will cause them to have to cut wages for the same numbers of people, which in turn will cause the overall wage rate to fall," he said.
The ONS said that the gap in working hours for men and women had risen, suggesting that the wage gap between men and women for the first time since March 2011 was wider than at any time since April 2008.