Tuesday, June 29, 2010

borrowing money (and killing jobs) to create short-term jobs today

Speaking of Keynesianism, here's a local angle on the govt creating jobs through spending-- from Dan Klepal in the C-J...

About $46 million in federal stimulus money has come to Kentucky -- including $6 million to Louisville -- to create a summer jobs program for disadvantaged young people and adults with children...The program is expected to put 10,000 people to work this summer statewide, with 800 to 1,000 of those jobs in Jefferson County...the program has funded jobs that pay anywhere from minimum wage up to $28 an hour.

Temporary jobs: Is that worth it?

A summer program starting halfway through the summer: Couldn't we have started this a little sooner?

"But we need more employers and we still have federal money available," Beshear said. "I hope employers are listening. We've got a great deal for you."

The "great deal" is free labor for the employer, because the stimulus money pays employee wages and benefits. Yarmuth said all employers are eligible for the program, regardless of how profitable they are.

A great, short-term deal. If the jobs are not explicitly short-term, will this be enough for firms to bear long-term costs?

"The stimulus program is meant to create economic activity, whether it's extending unemployment benefits or paying for a construction worker on the Watterson" Expressway, Yarmuth said. "It really doesn't matter how the money gets into the economy, as long as it does."

And to Yarmuth, unfortunately, "it really doesn't matter how the money gets into the economy", whether through taxes-- or debt and future taxes. It's all about the spending, right?


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