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Why hasn't the stimulus created jobs?
A job seeker looks at job listings posted at the East Bay Works One-Stop Career Center in Oakland, Calif.
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TEXT OF STORY
STEVE CHIOTAKIS: We get June unemployment numbers from the Labor Department today. It looks like the economy probably lost several hundred thousand more jobs. And of course, the lack of job creation defies the goals of last winter's $700 billion stimulus package. From Washington, here's Marketplace's John Dimsdale.
JOHN DIMSDALE: When President-elect Obama unveiled his stimulus package for the struggling economy back in January, he predicted...
PRESIDENT BARACK OBAMA: Our plan will likely save or create three to four million jobs.
But critics, like Michael Boskin, who was chief economic adviser to the first George Bush, says spending for construction, health and education projects has been too slow to generate many jobs.
MICHAEL BOSKIN: If they were really interested in stimulus they would have had the vast bulk of the funds get to people and create incentives for business to reduce layoffs immediately, not delayed over several years.
Instead of boosting spending, Boskin says cutting taxes would have gotten money into the economy more quickly. And Arizona State University economist Lee McPheters raises another problem: The stimulus has been spread equally around the country -- even though some states have far worse jobless rates than others.
LEE McPHETERS: So the money is distributed by population rather than distributed by where the problems are.
While some argue it's time to abandon what's left of the stimulus package, defenders urge patience. It will take a while, they say, for businesses to start hiring new workers. First they have to reduce inventories and become more confident about consumer demand in the future.
In Washington I'm John Dimsdale for Marketplace.
In November 2008, when the bank bailouts were first discussed I suggested that, instead of throwing good money after bad, Uncle Sam should distribute a certain amount of money (say, $500,000) to each tax-paying household with the proviso that 50% of it be used on debt reduction, 25% be put away for retirement and the remaining 25% to be spent by the recipient as he/she wished. Advantages? - 1) Debt reduction, putting banks back on a sound footing, 2)mortgage reduction, reducing foreclosures and stabilizing the housing market, 3)huge increase in retirement funds and corresponding increase in money available to banks for investment and 4)maintenance of consumer support of the economy. However, instead, Uncle Sam is bailing out special, well-connected industries and guess what? Just like "trickle-down" economics, we now have "trickle-down" stimulus, and at the same time we're rewarding the managers of those industries who are primarily responsible for destroying the economy. This is far beyond ironic - I have lost all faith and hope in the American crony capitalist system (and I'm a CPA!).
Here in Louisville, we HAVE seen jobs saved and created. Just to name a few areas: Public Transit, Education and Neighborhood Improvement. TARC, our public transit system, will be installing a green roof on their parking garage for the buses. That project had been in the works a long time, just waiting for funding and is generating construction jobs, NOW. We also are siphoning some of our share into the school system to keep education afloat as the tax revenues dry up that normally fund that system. We are also expanding our sidewalks along some busy suburban thoroughfairs and extending bike lanes/paths, making further strides to become a more bike-friendly city with the Stimulus Funds coming our way.
In CA, the LA County School board is laying off my niece's fabulous kindergarten teacher and stashing their stimulus funds in the rainy-day account.
Maybe it's not the President or your Congressfolk you should be complaining about. Try ringing the phones of the middlemen who are clogging the pipes in your city or state if you aren't happy with the current status of your area's share. Don't just blame somebody, DO something!
Obama's spending makes me nervous. First the stimulus, then the bank and car company "overhauls", and now health care "overhaul" and the Afghanistan war. All in times of record debt. I don't know what he's thinking. I voted for Obama because he is intelligent and thoughtful, and by all accounts his personal financial life was very sound.
But now I am fearful. I don't see that intelligence and prudence in his approach to spending. It bothers me because, as this story pointed out, the stimulus has done little so far to improve the economy.
When I reported on this, I was told we had to wait till June to see an impact. It's June, and we lost more jobs this month than last.
Please Barack, please stop spending.
I think this story shows that neither politic party really has an idea of how to get the country out of this recession. They sure did a good job of getting us here. Most likely it is going to take a combination of things: likely tax increases while cutting spending. The longer our representatives debate and never find a real solution, the one thing they do very well. The more it is going to cost the American worker, taxpayer, and home owner in the long run.
If tax cuts were all that was needed, we wouldn't be here now, right? If i remember right we had so many tax cuts in the last thirty years, eight in particular, that we doubled the national debt, right? So where did all that tax non-collection go? I know i put my tax cut in the bank because it was the conservative thing to do.
