Boost demand, invest in ourselves
Boosting demand is the key to generating jobs in our economy.
The state fiscal relief and the extension of unemployment benefits Congress passed this summer were steps in the right direction. These are the most
effective and efficient ways to boost output in this kind of recession.
Congress should also consider – and pass – President Obama’s proposal to increase infrastructure spending by $50 billion to invest in roads, rails, and runways. Our underinvestment in infrastructure threatens our economic competitiveness because every US business relies on our outdated transportation networks and electricity grids. Making long-term investments now that will boost job creation in the years to come is smart policy.
We need to extend and expand programs that put people to work. These include the Temporary Assistance to Needy Families Emergency Contingency Fund, which will have created 250,000 jobs by the end of September through public-private partnerships nationwide. The Local Jobs for America Act will create about 1 million jobs by providing $100 billion in funds over two years to protect state and local government jobs and create local government and nonprofit-sector jobs – if Congress passes it. And expanding our national service programs is an excellent way to meet pressing community needs while giving young workers job experience and tapping into older workers’ skills and expertise.
Another good step is the Small Business Jobs and Credit Act of 2010, which the Senate passed last week after great delay. Small businesses still struggle, and this legislation would create a $30 billion lending fund and provide $12 billion in tax breaks to help these crucial drivers of jobs and growth prosper.
Keeping tax cuts for the middle class also makes economic sense. But breaks for the rich do not. They swell the deficit and they don’t create jobs.
– Heather Boushey, senior economist, Center for American Progress
Unleash the power of small business
The US Senate just passed a bill called the Small Business Jobs and Credit Act. The thrust of the bill, which has been called “Son of TARP,” is a $30 billion Small Business Lending Fund to subsidize banks to lend to small firms. The government will infuse cash into banks by buying preferred stock and in turn prod the banks to make certain kinds of small-business loans using “linguistically and culturally appropriate outreach.”
But haven’t we tried before this top-down method of subsidizing and pushing the banks to meet the government’s objectives with TARP and housing programs? And why are we propping up the same old banks? According to the Kauffman Foundation, businesses less than five years old are America’s top job creators.
Tax cuts, or holding off tax hikes, will help spur job creation, but we also need to liberate to stimulate. This means ending outdated and counterproductive regulations. Last year’s Federal Register published almost 70,000 pages of new rules. Complying with all of them cost more than $1 trillion, according to the “10,000 Commandments” report by the Competitive Enterprise Institute’s Wayne Crews.
Achieving a bipartisan consensus on some areas of deregulation may not be as hard as it seems. The otherwise heavy-handed Dodd-Frank banking law enacted in July did contain a provision exempting smaller public companies from the costly Sarbanes-Oxley accounting mandates that were rushed through after the Enron failure. And an amendment to the small business bill sponsored by Mark Udall (D) of Colorado would have freed credit unions to lend more to business. Sadly, it wasn’t brought to the floor. Washington can help spur jobs, but only if it stops rushing to “create jobs” and instead fosters the free-market conditions that unleash small-business hiring.