If the government wanted to spend more money to save jobs, where would be the best place to put it now?

Let’s look at three choices.

1. Give tax cuts to corporations so they will hire more workers.  It is reported that overall, corporations are sitting on $800 billion dollars of cash equivalents that they don’t know where to invest.  Do you suppose giving them more money in the form of tax cuts would suddenly wake them up to ideas of where to put the extra money to work to create jobs?  Do you suppose lack of tax cuts is preventing them from spending the $800 billion they have already socked away?

2. Invest in more infrastructure projects.  Previously we couldn’t find enough shovel ready infrastructure projects to hit the ground running.  We are still in the process of investing and spending the money already set aside.  This is the money that the Republicans wanted spent on the extension of unemployment benefits because it wasn’t already being used right away.

3. The state governments are about to lay off 50,000 people because of holes in their budgets. Some of these people will be teachers, police, and firefighters.  Do you suppose that if the federal government filled that hole, that 50,000 jobs would be saved?  Most states’ constitutions don’t allow them to run a deficit.  There is no such restriction on the federal budget.

Gee, I can’t figure out which option to choose.  Can any economic genius help me make a decision?

On Nightly Business Report, Alan Blinder and Mark Zandi talked about their analysis which says that all the government attempts to rescue the economy have saved or created 8.5 million jobs.  They were talking about the study reported in the article, Blinder, Zandi Say Bailouts Likely Averted Depression.

Has anybody before had the audacity to come up with numbers like this?

Let me think real hard if I can remember anything of the sort.

How about my post on February 17th, 2010, Obama Saves 5 Million Jobs Through February 2010?

And they laughed when I sat down to the spread sheet.

The article, Halvorson Understands America’s Perils, describes the work that Debbie Halvorson is doing.

Congresswoman Debbie Halvorson, a representative from the 11th congressional district of Illinois, has a clear-cut strategy for creating the next generation of manufacturing jobs.

I titled my comment on this article Separate the Wheat From The Chaff.

Finally an article on OpEdNews that gets a lot right.

Wheat – implementing a National Strategy for Manufacturing

Wheat – legislative proposals to train the manufacturing workforce, boost productivity, incentivize growth, and create new jobs.

Wheat – The provisions in this Act would seek to aid in reversing the loss of our manufacturing prowess.

Wheat – modernize federal workforce training programs to better prepare participants for high-tech jobs in the manufacturing sector.

Chaff – Currency Reform for Fair Trade Act

Chaff – allows Chinese producers to sell its goods in the U.S. market at artificially low prices.  Those nasty Chinese actually selling us stuff at a bargain.  This has to stop.  Why can’t they just charge us more?  When was the last time you went to Wal-Mart and asked them to charge you more?

Some wheat and some chaff – extend tax incentives that allow manufacturers to more quickly recover the cost of purchasing new equipment and machinery.

Given our eventual need to balance the budget, it may be wiser to stop the disincentives that lower tax collections rather than first increase incentives that lower tax collections.  What I have in mind are the obscene incentives that make it millions of times more profitable to trade in financial derivatives than it does to manufacture something useful.  These tax collection killing incentives are doing far more to damage our economy than people have yet seemed to realize.

The lack of regulation and lack of taxes on these so called capital gains certainly enriches people for no productive value to our economy.  The relatively high incentives to do this kind of work instead of productive work draw our most talented away from the kind of work we need to be doing.

The article Fan-Powered Shopping Cart (Of Course) Awhirl at MIT on the Slice of MIT web site is a clear demonstration of the value of an MIT education.

It’s going to make me even more proud to show my diploma.