Stimulating the Job Market

Posted by: Gene M. | Jan 20,2008

OK, the jury’s basically out that the stimulus package hasn’t done much good, at least not yet.  There’s no doubt it’s better than nothing, but it’s hardly the windfall the economy needs to make a quick recovery.  So what can we do?  Or, more precisely, what can the government do to help spur the economy, if putting $800 in tax relief into taxpayers’ pockets does not quite do the trick.

As this article points out, what might be better for the economy is not putting money in people’s pockets, which after all may just lay dormant in a bank account, but to target specific sectors.  His theory is that the heath and education job sectors could help keep the economy afloat.  I would add that certain environmental projects aimed at curbing Global Warming could create new revenue.  The basic premise though is that the money should be targeted rather than a general stimulus package.  His thesis is that the government should increase grants to educational and health institutions, which could help the economy overall.  Job growth is as good for the economy as spending, and being that the healthcare industry is growing at a steady pace – especially with Boomers entering their retirement years – this may be one antidote.  

This is a controversial proposal and I honestly don’t think it’s enough to stave off the economic downturn, but it does create an important distinction.  Generalized tax cuts are pretty uncontrollable in terms of how those tax dollars are spent, but a more aggressive stimulus package needs to be implemented.  This is in part why the stock market fell on Friday – investors saw the stimulus package as pretty feeble.  The truth is we may have to wait until 2009 for a sweeping stimulus package to come into effect.  

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