The Next Stimulus Package Must be a Job Creator

Yesterday Ben Bernancke suggested that another stimulus package be offered by Congress. The focus of this second package is debatable, but two main areas are to extend unemployment insurance (a large population of people are about to expire their benefits) and infrastructure. A good overview of the situation is provided here in an article on called Here comes stimulus – question is how.

But I really like what the Economic Policy Institute (EPI) put together. Check out this Economic stimulus essentials page of theirs for an overview. Also check out this post I wrote on January 22nd, 2008 called To Keep Economy Growing, President Bush to Push for Tax Rebates, Breaks for Businesses, and Foolishness. Here is an excerpt:

What the EPI wants is to fill the working void by employing thousands
of people related to construction work and craft work (plumbing,
painting, carpentry, tiling, and etc). This makes sense for two
reasons. The first is the housing slow down has left many construction
workers waiting for the next uptick in the housing market. These
workers are readily available. The second is that the type of work the
EPI envisions for them is infrastructure based. This is where I think
the EPI really hits a home run. The US infrastructure is neglected. As
I’ve wrote in other posts (Big Prizes, Risk Aversion, and Why No Changes),
US businesses are avoiding high risk, high reward projects because of
the complication of the infrastructure. Much of what happens now is the
repackaging of tried and true ideas. It is only incremental innovation.
No leaps. As the EPI writes, an update to the infrastructure of the US,
whether it is repairing bridges, utilities, roads, or school projects,
serves two ends. It gets many people back to working and it
accomplishes work that needs to happen anyway. This will prompt more
business development than a tax break.

The one area I wish the
EPI focused on was the prodding of innovative business projects. With
some of the funding allocated, the US government should provide
interest free loans or incentives to businesses that launch green
projects within the next six months. There is a backlog of projects
ready to go, they just need the funding or the ability to get past the
economies of scale barrier. These projects would spur the next wave of
productivity in the US. Otherwise we pass this slow period and exit it
into… what? What is the next breakthrough?


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