Anouk van Gaalen

Critique on the blog “Unemployed Veterans”

As the author of the blog mentions the economy has been suffering lately and the job market has been very tight. Even though the economy has shown a slight growth lately, there are still a lot of people without a job. Especially for veterans it can be very hard finding a new job, since they have a different education than is needed for most jobs and especially for the job vacancies. This is called structural unemployment: there is a mismatch in skills between the veterans and employers, but also cyclical unemployment, since the veterans have an extra hard time finding a job because companies are uncertain about the suffering economy and they are not hiring. That is why the government decided to interfere in the economy with expansionary fiscal policy: a bill that is supposed to provide more jobs for veterans. They are lowering the taxes for companies if they hire veterans and the government will retrain veterans to make them hirable for different kinds of jobs. As the author of the original post states, this reduction in taxes for companies is supposed to reduce the unemployment rate, this will increase the national income and therefore it will be a boost for the economy, so will the new education for the veterans give them more chances to be hired and thereby reduce the unemployment rate, increase the income, and the Gross Domestic Product therefore as well.

As the author of the blog says the lowering of the taxes will encourage businesses to hire veterans, because this means that their total amount of cost will lower and the company will be more profitable. The companies can either spend the extra money, which means that the GDP will grow (Investments) or they can reduce the prices of their products or services so that the demand for their product will rice and the GDP will rise through the consumers.  This shows that the lowering of taxes is increasing the GDP and therefore expansionary fiscal policy.

This bill is however only a small part of the Job Package Obama promised. The veterans are only a small part of all the unemployed people. There will have to be a lot more policy to reduce the total unemployment rate. Obama promised to create one million new jobs to reduce the high unemployment rate and so far he has not been successful doing that. Even this bill for the veterans is not signed by Obama yet, but the White House has said that it supports the bill, so it is likely that this bill will go through. This means a step in reducing the unemployment rate in the United States.