It could be that. And like you can come up with a couple mechanisms that are possible, someone in the field probably knows a half dozen or more potential mechanisms you and I don't even know exist. It is tough to say I bet.
Yeah, I saw this. Pretty screwed up....this is why governments aren't always so great.
@Ricky10 - are you in MA if you don't mind me asking? I am too.
Maybe you mean something that I am not getting, but we already "cycle" the economy. That is what the fed is for. Increasing and decreasing interest rates will inversely effect employment and kind of puts the brakes on things. I.e. - increasing interest rates should unemployed people, which reduces inflation and slows economic growth.
A lot of this is based on economic theory from the Great Depression and it can be controversial - but it is also the type of thing that presidents don't follow very well because what president wants to slow the economy during their term?
Saying debt causes a depression is a little bit of an over simplification but I get it and can agree.
But one thing to consider. During periods of "full employment" - let's take it to the extreme and say actual full employment - that means everyone is employed so if I am an employer and I need to hire someone, I basically cannot (unless I steal from another job which then cannot be filled).
This means that whoever I hire for that job can demand just slightly less than everyone else and I have to pay it. And then that position has to be filled so that employer has to pay more, etc.
And in order to pay these salaries, as all my salaries start to increase in cost, I have to increase prices. So sure, everyone is making more but trailing behind that everything is costing more and more. That is inflation.
During the Obama administration we had hidden runaway inflation that no one talks about - during that time every food product on the shelves stayed the same price but went from a half gallon of ice cream to 3 points, or 1 pound of chicken to 3/4 of a pound. It was strange to me when it happened that it happened all at once and no one noticed.
Anyway, with that paradigm and the fact that we are at full employment already - what happens if we lose 2 million employees????
Sure, losing 200,000 will have an impact and could cause a depression.
Losing 2M will destroy the value of the US dollar, cause a depression and we will end up like Russia waiting in line for a loaf of bread or Germany when you needed a wheelbarrow full of money to buy bread.