Instead of more top-down stimulus with another emphasis on “shovel-ready” jobs or Washington pet projects, President Obama should appeal directly to the nation’s 50 governors by proposing a direct grant to each state to spend as it sees fit.
A state-directed recovery initiative would be the quickest, easiest way to reduce unemployment and get the economy moving again. Congress would simply distribute money to the states, based on population and with no strings attached. Each state could use these funds however it chooses, whether by cutting taxes on small business and families, or by investing in education or infrastructure. This is far simpler than the Obama administration’s proposed American Jobs Act — which, despite many attractive features, reads like a laundry list of federally inspired programs.
Leaving aside the twaddle about “federally inspired programs”, it’s a good idea. And one I proposed over four years ago:
What would help is if the $300-$1200 per household [of a proposed tax refund] were split between the muncipality and the state in which that household resides.
Most local and state governments are suffering from budget shortfalls due to property tax revenue decreases and lower sales tax revenues. Most also have outstanding deferred maintenance problems. If given the money, they will spend it–all of it.
As the op-ed notes, some of it will be spent stupidly, whether on bridges to nowhere or tax cuts for the wealthy (the latter basically do nothing to get more money into circulation). But some of the money will be spent–or at least used to offset further cuts.
Why this wasn’t obvious four years ago mystifies me, although I think many economists and other commentators just don’t give a shit about unemployment. More importantly, it’s tragic.
This stuff isn’t rocket science. Hell, it’s not even microbial genomics. Just find a way to spend the fucking money, I beg you.