With the federales quick to bail out the banks â€“ and maybe the Big 3 â€“ itâ€™s only natural to wonder if the fine folks in Washington will bail out the jobless. Donâ€™t hold your breath. Short of extending unemployment benefits (which theyâ€™ve already done), legislators canâ€™t to do much to ease the direct pain of being unemployed.
But they can do something. President-elect Barack Obama proposed last week to invest $150 billion in technology development and job creation over the next decade. And there are more immediate things the government can do to increase demand â€“ which increases jobs â€“ sooner.
â€œWhat the government must do to have a positive impact is â€˜shockâ€™ demand,â€ explains Ed van Wesep, assistant professor of finance at the UNC Kenan-Flagler Business School.
One way to do that is through infrastructure projects, as proposed by former Secretary of Labor Robert Reich and the president-elect, who last week announced a massive $25 million road and school-repair program.
â€œThis is a good time to invest, given the state of the construction industry,â€ Van Wesep says, but a program like this â€œusually takes a while to clear the bureaucracy and, once it does, itâ€™s too late.â€
A faster solution, he says, is to provide cash directly to those who will spend it, like state governments and less-wealthy individuals. That could come in the form of tax cuts and rebates.
Though the Obama-Biden campaign promised middle-class tax cuts and the quick repeal of President George W. Bushâ€™s tax cuts for the wealthy, no firm plans for putting cash in the hands of those who need it most have been announced. Stay tuned. â€” Margot C. Lester