NCPA - National Center for Policy Analysis


October 20, 2009

What can government do to crank up America's creaky job machine, asks columnist Robert J. Samuelson?  Die-hard Keynesians insist that only more government spending and tax cuts will accelerate job growth.  But many other economists fear that exploding federal debt -- incurred partly to pay for more spending and tax cuts -- could trigger a new crisis that would destroy jobs.

With the labor force expanding by more than 1 million new workers annually, economists Joseph Seneca and James Hughes of Rutgers estimate that even the job growth of the 1990s (2.4 million a year) wouldn't reduce today's 9.8 percent unemployment to 5 percent until 2017.

Economists Larry Mishel and Kenneth Rogoff suggest that we scour government for policies that discourage job creation:

  • Consider the Environmental Protection Agency's recent proposal requiring permits for large industrial facilities emitting 25,000 tons of greenhouse gases annually.
  • The proposed rule is 416 pages of dense legalese.
  • New plants or expansions would need permits demonstrating they're using "the best practices and technologies" (whatever they might be) to minimize six greenhouse gases.
  • Permits would be granted on a case-by-case basis.

How could this promote investment and job creation, except for lawyers and consultants?  Government erects many employment obstacles: restrictions on oil and natural gas drilling; unapproved trade agreements; some regulations.  But reducing these barriers would require the Obama administration to choose between its professed interest in more jobs and its many other goals -- a choice it has so far avoided, explains Samuelson.

Source: Robert J. Samuelson, "Who's going to get the jobs machine going?" Washington Post, October 19, 2009.

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