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December 8th, 2009

“Can the Jobs Summit Yield a Cost-Effective Solution?”…Guess Not



Last week we asked if the White House jobs summit would be able to yield a cost-effective solution to stem job loss. Judging by the president’s proposals to increase employment outlined in a speech Tuesday, the answer seems to be “not really”:

The president’s proposals addressed three main areas. He focused primarily on help for small businesses, targeting them with tax credits to encourage hiring and unused Wall Street bailout dollars to increase lending. He also backed a one-year elimination of the capital gains tax on gains from new investment in small business stock and other measures.

The other two priorities for the president were to call for infrastructure spending for highways, railroads, bridges, tunnels, airports and seaports, and a new program to give rebates to people who retrofit their homes so that they’re more energy efficient. He also backed an extension of aid and health insurance assistance for the unemployed.

Don’t we already have billions in unspent stimulus funds slated for “highways, railroads, bridges, tunnels, airports and seaports?” Furthermore, to our understanding, the legislation which created TARP specifically limited the usage of unspent TARP funds to repaying the Federal deficit.

The proposals’ critics — mainly members of the GOP who became targets of blame in the president’s speech for causing his administration to inherit such a deep crisis — slammed Mr. Obama’s ideas, calling them a second stimulus:

Republicans, however, slammed Obama for dipping into the federal piggy bank once again to finance a jobs program that might or might not work.

“This is stimulus two. They won’t call it a stimulus,” House Minority Leader John Boehner, R-Ohio, said.

“The policy of this administration is if you’ve got it, spend it,” said House Republican Conference Chairman Mike Pence, R-Ind.

In a Reuters article — which classified the president’s proposals as “modest steps” — the president was quoted as saying “There are those who claim we have to choose between paying down our deficits on the one hand, and investing in job creation and economic growth on the other. But this is a false choice.” By this reckoning, it seems the president is set on dedicating more cash to beef up employment.

Is it even possible to improve the employment picture without spending money?

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Tim Manni

Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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