In the US, this debate over a new stimulus program points to a radical change in the economies of developed countries since the 1930’s.
In its last vote of 2009, the House narrowly passed the bill, 217-212, without a single Republican supporter.
Democrats tick off the job prospects from the House bill’s $75 billion in infrastructure and public sector spending: tens of thousands of new construction jobs, 5,500 more police officers, 25,000 additional AmeriCorps members, 250,000 summer jobs for disadvantaged youth, 14,000 part-time jobs for parks and forestry workers.
It may be, though, that the republicans’ doubts are realistic.
The job creation issue is complicated. Much of the money in the House bill goes to programs that may stimulate the economy but don’t appear to directly put people to work.
There’s $41 billion to extend unemployment benefits for six months and $12.3 billion to extend a health insurance subsidy for people who have lost their jobs. There’s extension of a child tax credit for poor families, $23.5 billion to help states cover Medicaid costs and $23 billion so states can support some 250,000 education jobs over the next two years. An additional $2.8 billion goes to clean water and environmental restoration projects.
Even the investment in “shovel-ready” highway and bridge projects may not immediately translate into a reduction in the nation’s 10 percent unemployment rate.
It looks to me that the recipients of this new stimulus are government supported projects that probably already have plenty of people available to provide some extra services without hiring new workers.
Dan DuBray, spokesman for the Interior Department’s Bureau of Reclamation, said “Projects in Reclamation are much akin to planes waiting on the taxiway waiting to take off.”
The difficulties point to one of two things, either Keynesian style stimulus programs are no longer viable for modern economies, or the US government is diverting funds towards programs that support the wealthy rather than those in need.
Conspicuously absent from the House plan were President Barack Obama’s proposals to attack unemployment through tax credits for small businesses that create jobs and for homeowners who make their dwellings more energy efficient.
A job-creating tax credit for small businesses has support among some Democrats in the Senate, even though critics fear it may be too complex to work.
It may be that Keynesian policy is no longer viable, but I am afraid also that I do not trust the motivation of the American lawmakers.
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