Pro and Con: Stimulus jobs

YES

By Christina Romer, 
chairwoman of the Obama administration’s Council of Economic Advisers

I can’t resist pointing out a fallacy in a common critique. ... People say, “The unemployment rate is even higher than you all said it would be with a stimulus. That means the policy must not be working and may actually be making things worse.” Well, that argument is, to quote a recent New York Times editorial, “just plain silly.”

To understand why, let me give you an analogy. Suppose you went to the doctor for a strep throat and he or she gave you an antibiotic. Sometime after you get the prescription and maybe even after you’ve taken the first pill, your fever spikes. Do you decide the medicine was useless? Do you conclude that the antibiotic made your illness get worse? Surely not. You probably conclude that the illness was more serious than you or your doctor thought and are very glad that you saw the doctor and started taking the medicine when you did. Well, that was exactly the situation with the economy. ... The fact that the economy deteriorated between January, when we were doing our projections, and the end of March simply reinforces how essential it was that we took actions when we did.”

NO

By U.S. Sen. Johnny Isakson (R-Ga.), Senate Health, Education, Labor and Pensions Committee

Georgia Department of Labor statistics show our state has lost more than 300,000 jobs since the recession began in December 2007.

According to the White House, the stimulus bill passed in February has saved or created 30,800 jobs in Georgia. At this rate, it will take 10 years for the stimulus to bring back Georgia’s lost jobs. That is unacceptable.

To accelerate job creation and economic recovery, American needs a pro-growth agenda. The homebuyer tax credit, for example, has generated 350,000 home sales this year and should be continued. The lower capital gains tax rate, which sunsets in December 2010, should be made permanent.

The administration’s proposal to tax offshore earnings by American corporations at 35 percent should be rejected. Federal spending should be targeted only to needed infrastructure such as roads, bridges, runways and ports, not to more bureaucratic programs.

Most importantly, we must restore credit to small businesses and ease rigid mark-to-market requirements for America’s banks to free up capital for responsible lending.

These kinds of responsible, pro-growth actions will create private sector jobs and restore our economy far better and faster than more stimulus programs to fund bigger government.