Economists and other experts, meanwhile, are flooding the zone with suggestions. Clinton-era labor secretary Robert Reich has weighed in. So has the U.S. Chamber of Commerce. Just this week, the NAF hosted a four-hour jobs symposium; the liberal Economic Policy Institute (EPI) issued a five-part job-creation plan; House Democrats hosted five economists at a jobs summit, and the Joint Economic Committee scheduled a hearing for Thursday with one witness: Christina Romer, chairman of the White House Council of Economic Advisers.
Conservatives and business interests, as always, would like to see broad corporate tax cuts, fewer regulations and limited government taht is an indirect way of increasing employment.
Republicans are still pushing this agenda even though tax cuts are one reason we have a $1.4 trillion deficit, even though lax regulation and hands-off government brought Wall Street and the rest of the economy to the brink. This is not going to happen because it was tried for the past eight years and didn't work.
So let's move on. Here are some ideas aimed specifically at creating or saving jobs:
-- A tax credit to some or all employers for each job they create
-- A one-year payroll tax holiday on the first $20,000 of income
-- Additional direct relief to states and cities, so they can avert lay-offs and service cuts and the domino effect that has on contractors and suppliers
-- Extension of unemployment benefits to help the jobless and avoid the same domino effect
-- A substantial federal investment in infrastructure (EPI likes school construction and renovation; Lind suggests nitty-gritty repairs and upgrades to roads and bridges.)
-- Direct creation of public jobs
-- Redirection of TARP money from big banks to communities and states
-- Extending the first-time homebuyer tax credit into next year to bolster the housing industry
Several ideas already are being acted on. Democrats are trying to extend unemployment benefits that are due to expire at year's end. Obama outlined plans Wednesday to redirect TARP money to community banks and the Small Business Administration, the goal being to get more and bigger loans flowing to small businesses. And White House economic adviser Larry Summers told Reuters the administration is open to extending the home buyer credit. In fact, President Obama announced an increase today to Small business loans from $2 million to $5 million.
Some signs point to a job-creation tax credit as a next step. Obama proposed it during his campaign and it was in an early version of the recovery package. EPI, in a first, is among those pushing it hard. "It's a bit odd coming from a left-of-center group," EPI president Lawrence Mishel told me. So far, he said, business tax cuts meant to stimulate the economy have been largely "a monumental waste of money. At least this type of business-oriented tax credit is focused on jobs."
Mishel says 10 to 11 million jobs are needed to return to a pre-recession unemployment rate. The EPI says its tax credit would last two years, create 5.1 million jobs, and cost $28 billion in tax revenue. The net cost would be half that due to savings in safety net programs such as Medicaid and unemployment compensation.
There are potential downsides. Employers could try to game the system. There could be a "Cash for Clunkers" effect – hiring delays while employers wait for the new tax break, and a falloff in hires when it expires. But Lind says the credit is a useful response that's politically doable. "If Congress does something, it's most likely to be this," he said. "Congress always prefers to cut taxes than to spend more."
There is a school of thought that anything Washington does on jobs will be behind the curve -- that by the time it kicks in, it won't be needed. This could turn out to be the case since the stimulus package passed in February was designed to have maximum impact next year. But waiting is a risky course. Former president George H.W. Bush tried it in 1992 and failed to communicate sensitivity to recession victims. He lost, even though the economy had started to recover.
Economist J.D. Foster, who served in the Bush White House and now is at the conservative Heritage Foundation, says everyone understands that the economy doesn't respond quickly to government action and "you don't have to enact dumb policies to convey that you care."
But the economists House Speaker Nancy Pelosi invited to Capitol Hill for Wednesday's summit, including Mark Zandi, who advised Republican John McCain's 2008 presidential campaign, said the economy is fragile and policy makers need to continue being aggressive.
The dilemma for Obama and Congress, as the economists acknowledged, is how to be aggressive about creating jobs and reinforcing the recovery, when almost every way to do that involves spending more money or taking in less -- which will swell the already frightening deficit.
But deficits are a relatively abstract public concern. Lost jobs, underemployment and giving up the search for work are personal tragedies. Those personal tragedies are now affecting nearly a fifth of Americans. As political brainteasers go, this is a pretty easy one.
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source: http://www.politicsdaily.com/2009/10/22/help-wanted-what-s-the-best-way-to-create-more-jobs-asap/
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