A Second Stimulus?

This week in the House of Representatives (it’s a soap opera, not unlike As the World Turns), Democrats started discussing a possible jobs bill. Now that the U.S. unemployment rate is officially greater than 10% clearly something must be done (before it was obviously under control, but now that we’ve reached the magical 10%, Congress must act to save us all).

Of course, let’s be clear, this will not be a second stimulus bill (or at least we definitely wouldn’t want to call it that because the public probably wouldn’t like it), the bill will be clearly focused (because Congress is great on focusing) on jobs. So will Congress just throw more money at the problem? Supposedly the main focuses of the bill will be:

* A transportation bill that could cost up to $500 billion
* A tax credit for businesses that create jobs
* Assistance to state governments, which otherwise would lay off teachers, police and other employees as they cope with plunging tax revenues and rising social spending
* Low-interest loans for small businesses
* Another extension of unemployment benefits, which otherwise could run out for millions of jobless workers
* An extension of health-insurance subsidies for the jobless
* A transaction tax on over-the-counter trades in unregulated "dark markets"

On the one hand, our deficit is already over $1 trillion, and this bill certainly won’t be paying for itself in the short run. As House Republican leader John Boehner (heh heh) put it, “Americans are asking, 'Where are the jobs?' But all they are getting from out-of-touch Washington Democrats is more spending and more debt piled on our kids and grandkids. Instead of doubling down with more spending and borrowing, the American people want fiscally responsible solutions to get the economy back on track.” http://news.yahoo.com/s/ap/20091118/ap_on_go_co/us_congress_jobs_bill

On the other hand though, how else are we going to create jobs if we don’t spend any money? According to economist Robert Reich, “The Administration's biggest economic mistake so far was to badly underestimate last January how bad the employment situation would become by Fall. As a result, it low-balled the stimulus -- settling for a plan that, while avoiding even worse job losses, didn't go nearly far enough.” http://www.robertreich.blogspot.com/