Sunday, January 31, 2010

Why the Stimulus Falls Short

Joshua Frank: Why the Stimulus Falls Short:
Cross-posted from Counterpunch

Doug Henwood: "...[W]hat we got was a bill that did some good things - extending unemployment benefits, picking up health insurance costs for the laid-off, etc. - but one that also was too loaded with tax breaks and other indirect mechanisms that are supposed to create jobs. If you divide the amount of cash spent, according to, by the administration's estimate of jobs 'created or saved' - whatever that means exactly - by the StimPak, you find that the cost per job is something around $250,000."

Joshua Frank: "That seems like a very ineffective, wasteful figure."

Doug Henwood: "Yes, and if you allow for multiplier effects - someone whose job is saved spends more money than someone on the dole, which saves other jobs that would have otherwise evaporate - then it's maybe $150,000-175,000 per job. That's still preposterously inefficient, however. You could have created old-style public works jobs at about $50,000 a pop. You could bring the old manly road-building, pipe-laying model into a more gender-equitable world by creating or saving jobs in teaching and childcare."

Read rest of interview

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