Attempts to paint the economic stimulus package as a failure begin with wordy paeans to budget austerity and end with anecdotes of Spanish wind turbines and prison inmates. Responsible Republicans claim to have proposed a more effective alternative to the stimulus, no matter that an economic adviser to their own presidential candidate rates the effectiveness of tax cuts lower than that of government spending.
But the stimulus truly was a model of political compromise, providing that devilish mixture of effective public policy - increased unemployment benefits, help for the uninsured, state aid - and politics - scaled back spending and a bill with a diluted purpose. This last element, embodied by a piece of legislation designed to boost aggregate demand and at the same time increase employment and prevent hardship for the worst off and invest in a clean energy economy and set the stage for long-term economic growth, was probably necessary for passage but also ensured that no single narrative for the stimulus's impact could be created.
Imperfect provisions accepted for expediency's sake - beyond the reduced size of the package - include state aid that shortchanged cities, shovel-ready requirements that have been observed more closely than requirements to focus money on areas of economic distress, and at times overly burdensome reporting requirements. Of course, the fact that we are in the midst of a "jobs crisis" does not mean that alternative measures should not be taken to deal with other problems (for instance, our gaping infrastructure deficit). But, especially now that Speaker Pelosi is considering deficit-neutral jobs legislation, the disparate nature of the stimulus perhaps drove a permanent wedge between what we think of as a stimulus bill and what we consider a jobs bill.
Whatever the actual content of the likely jobs bill, the legislation must be as straightforward as possible with the number of jobs saved and created as simply relatable to dollars spent as possible. This means that the administration and Congress should reconsider its support for something like the jobs tax credit. The credit, which would provide a tax break to companies for hiring workers, is as politically attractive as the housing tax credit, but is also susceptible to the same type of fraud as the housing credit and just as bereft of benefits.
The most important task of the administration, though, is to fight against the notion that saved jobs are any less important than created jobs. Sure, job creation is a sign that the economy has turned around for the non-Wall Street portion of the United States. But saved jobs mean fewer unemployed, fewer benefits paid out, more consumer spending, and less foreclosures, among other things. In fact, one of the best proposals for additional stimulus - direct aid to state and cities - is almost wholly reliant on saving jobs (some 900,000 of them). Right now, the administration is losing the battle for why saved jobs are important.
Future administrations will perhaps be loath to portray "stimulus" bills as job creators. It is essential, then, that the benefits of any "jobs bill" be readily apparent.
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