Continued jobs loss perpetuates the recession and deepens the global economic depression, putting further downward pressure on markets worldwide. What to do?

The ability of the global economy to recover depends in large part upon the American jobs market. Our fundamental economic systems in the United States depend in very large part on an economy that creates or maintains a stable jobs base.

Without stability, all sorts of things begin to collapse. Let’s look at just a few.

A large municipality has several million residents. Many of its companies, large and small, have closed because they cannot borrow. As a result, they’ve terminated about 14% of the city’s workforce. Those people put added pressure on municipal government as crime rises and health deteriorates. More police, fire and ambulance calls to emergency services add higher costs to the city, while those unemployed are providing the city with no tax revenues from employment taxes and defaulting on real property taxes, water and sewer fees and so on. Eventually, the municipality realizes it can no longer afford to provide many of the services people expect – such as sanitation collection, healthcare and some emergency services like ambulances.

The city’s bonds drop in value and investors slow their purchases, so city revenues are cut further. Soon, property values decline considerably and the city deteriorates into a place few want to live. With this, more companies leave, taking more jobs. The unemployed can’t afford basic services such as food, closing even the lowest priced restaurants, grocers and convenience stores. A secondary consequence of property value decline and increased foreclosures is the lowering of property tax rates. Government is forced to lower the tax rates to give incentives to people to move into the city or just to stay there. Eventually though, the city needs help and requires either a bailout from state and Federal government or it’s forced to shut down all services and file bankruptcy.

No matter what happens, political instability forced by public dissatisfaction with the way municipal leaders have dealt with the matters at hand causes dramatic change in city management and elected officials at all levels in that city are voted out of office.

Sounds like an unrealistic and horrific scenario? Well, just look at what happened to New York City and Detroit in the 1970’s.

With the crisis in employment, now down 6.5% in October and downward revisions for August and September (as we previously predicted), this scenario will begin to affect municipalities, counties and states across the Nation.

Now let’s look at the automotive industry – presently in a rapid downward spiral. The potential collapse of one or more American auto makers could cause hundreds of thousands of direct job losses and upwards of two and a half million total losses.

Inventories of 2008 models remain unsold because banks are not making auto loans. Dealerships are closing or cannot borrow to ride out the bad times and lay-off workers. With fewer sales, they need less sales staff.

This won’t simply be a problem in Detroit, but in every single community in the country and is a crisis that every elected official, from small town judges to big city mayors and members of both houses of Congress should worry about.  It’s a crisis that will prolong the Depression and worsen the recession.

The increasing level of jobs loss in the United States will have a considerable impact on everything, right up to international trade. Consumer spending will drop precipitously and this will filter down to every sector.

We believe the solutions lie in improving the lending process for one thing – improving bank lending practices so that loans can be made fairly and safely in future.

In order for new jobs to open, new businesses must open and existing businesses must be able to access capital, particularly in the short-term.

We must invest in new industries, in existing business, which is why we included within Invest In America, a provision for a stimulus package focused on small to mid-sized business investment by government.

Jobs are created by business, and the demand for business to hire is created by cashflow. We need to improve both. When businesses are funded and trading in commercial transactions, they create additional jobs. Our program would create more than 2 Million jobs, mostly Main Street employment. We urge Congress to look at this broad approach and take positive action.