An American Jobs Plan
The Economic Policy Institute in the US have released a five point American Jobs Plan which, hopefully, will be a major focus of discussion at the soon to be convened Presidential Jobs Summit.
Speaking to a joint CLC/CCPA meeting a couple of weeks ago, EPI President Larry Mishel – who has been invited to the Summit – said that the Obama Administration is very likely to introduce a second major stimulus package, notwithstanding concerns on the right side of the spectrum that the current deficit is already too large. As this Plan argues, the economic costs of inaction would far outweigh the costs of adding to the deficit at a time when unemployment is already over 10% and set to fall only very gradually even if a tepid recovery begins, which is itself far from certain.Â Deficit worriers can note that the EPI plan does finance part of it its proposed spending package through a Financial Transactions Tax to be introduced in three years.
The major elements of the EPI plan are extended EI benefits and continuation of health benefits; relief to state and local governments to stabilize public sector employment; investment in infrastructure with a focus on school modernization; and direct job creation in the public sector. They also propose a job creation tax credit for private sector employers.
The plan proposes to spend an additional $400 Billion in year one, which would create an estimated 4.6 to 6.0 million jobs andÂ boost GDP by about 3%.
All of which is well worth reading as we in Canada begin discussions of how to add to stimulus measures in the next round of federal and provincial budgets.
Here’s a response to the EPI/AFL-CIO plan I read on the “Common Dreams” website.
And here’s Dean Baker’s press release:
Every Job the US creates now will be from speculative bubbles that are being formed. Just like all the Jobs that were directly or indirectly created by 300$ billion deficit, and 1% interest rates set by Bush/Greenspan to fight deflation from NASDAQ pop in 89-01 with bailing out long term capital management that created too big too fail Banks & a housing boom or S&P bubble.
So now rates wont be incrementally raised from 0-1% to about 6% like before because the money in circulation decreases as the higher rates increasingly takes from the disposable income erasing jobs just like the housing jobs that disappeared when rates inched up.
Americas central bank will never raise rates again in fear of derailing jobs, stocks, equities, commodities. A combination of factors will cement the weaker dollar. The FED likes the weaker dollar has bailed out institutions prosper from proprietary trading in carry trades to race back and repay the Fed.