Notes &
What sort of policies might make a real dent in unemployment? Providing subsidies to businesses that hire new workers is one. Extending extra tax cuts to firms that build new factories and offices is another. More radical ideas include investing in infrastructure projects, importing a version of the job-sharing scheme that Germany has used, and launching a national community-service program. Most of these things would involve the federal government’s borrowing and spending more money, but that, of course, is what governments are supposed to do in an economic downturn.
On Wall Street, unlike in Washington, there is general agreement that the 2009 stimulus package was one of the main reasons that the economy expanded, however slowly, in the past couple of years. So suggestions that a new jobs package would spook the markets are without foundation. Even now, after the bond downgrade, the markets and credit-ratings agencies would probably embrace a carefully costed package that is limited in duration, because it makes economic sense. The quickest way to reduce the budget deficit is to get potential taxpayers back to work.
