Can a Tax Credit for Employment Growth in 2009 and 2010 Restore Animal Spirits and Help Jump Start the Economy?
Bishop, John H.
[Excerpt] In the last three months employment declined by 1.2 million jobs and the number of part time workers who want but cannot find full-time work increased by 1.5 million. We are in a downward spiral that John Thain of Merrill Lynch predicts will be compared with 1929-33. Economists of all stripes (eg. Martin Feldstein, Larry Summers, Nouriel Roubini, Edmund Phelps, Paul Krugman, Brad Setzer) are recommending a massive temporary fiscal stimulus of 4 percent of GDP or more. Investments in infrastructure, renewable energy, and energy efficiency are preferred because they raise future productivity. Many worry, however, that infrastructure projects alone cannot quickly generate the $600 billion stimulus that many believe is necessary? Last summer’s tax rebate provided little stimulus. Other guns must be brought to the battlefield. We need a cost effective way of rekindling the animal spirits of the nation’s six million employers and fourteen million self-employed entrepreneurs.
tax credit; employment growth; animal spirits; Barack Obama; New Jobs Tax Credit
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