Advertiser Disclosure
X

Advertiser Disclosure: The credit card offers that appear on this site are from credit card companies from which MoneyCrashers.com receives compensation. This compensation may impact how and where products appear on this site, including, for example, the order in which they appear on category pages. MoneyCrashers.com does not include all credit card companies or all available credit card offers, although best efforts are made to include a comprehensive list of offers regardless of compensation. Advertiser partners include American Express, U.S. Bank, and Barclaycard, among others.

By

Views

33.9K

Dig Deeper

23,306FansLike
15,690FollowersFollow
35,973FollowersFollow

Become a Money Crasher!
Join our community.

Best Ways To Stimulate The United States Economy And Create Jobs

Views

33.9K

What is the number one topic on the mind of American citizens? The answer is Jobs, Jobs, Jobs (and not Steve Jobs of Apple)! High unemployment and a slow recovery have everyone worried about the current job market. Policymakers, business owners, and individual citizens all have different ideas about the best way to stimulate job growth. The ideas being proposed vary from spending more money to cutting taxes. Let’s take a look at a few of the best job creation ideas being discussed:

A Second Stimulus

Congress passed a $787 billion dollar economic stimulus bill in 2009 which included nearly $500 billion dollars worth of investments in different economic sectors and nearly $300 billion in tax cuts. The bill did have some effect on the United States economy but was not the job creator that it was expected to be. There is currently talk of a second stimulus bill which would be more focused on actual investments in the economy. Some economists believe that a stimulus bill focused more on infrastructure building may provide a greater boost to the economy as this may have more sustainability.

Tax Cuts

Another proposal being discussed is creating further tax cuts for small businesses and corporations. I recently wrote a post about the pros and cons of tax cuts. Tax cuts would allow companies to retain more of their earnings. The hope is that large corporations and small businesses would then turn around and hire more employees. Another benefit would be increased capital expenditures spending. Increased CapEx spending would require the sectors that help supply and build the “Capital” (or physical assets) to hire more workers in order to keep up with the increased demand for goods and services from the businesses that are now spending more due to the tax cuts. Congress is currently debating whether or not to increase business tax cuts on both small and large businesses.

Jobs Bill

The simplest solution to create jobs may be to pass a jobs bill. A jobs bill would be directly aimed at creating jobs in the small business sector. The goal would be to increase the availability of credit for all small businesses. Since the economic collapse of 2008, credit has been tight for small businesses. Over the past year, credit has become readily available for large businesses, but small businesses are finding that banks still have not turned on the spigots. The jobs bill would be aimed at increasing SBA lending and lowering capital gains taxes, which would encourage entrepreneurship and incentivize investment.

Funding To State and Local Governments

The best bet for the federal government may be getting the money into the hands of state and local governments. Funds disseminated to local governments have the greatest multiplier effect. The Goldman Sachs Group estimates that funding to state and local governments provides twice the bang of individual tax cuts for the rich. By getting funds to these governements, it would allow states to stop raising taxes on residents and from cutting needed services, which would help lower the unemployment rate and not further punish overly-taxed residents.

Do Nothing

This philosophy is rooted in the belief that the private sector alone creates jobs and government policy simply gets in the way. It doesn’t matter what the federal government does because the government cannot create jobs. Less regulations would foster a favorable pro-growth business environment and allow the private sector to create more jobs. Sometimes the economy, just like the stock market, needs a correction and you need to let it run its course.

In my opinion the best way to create jobs would be to take a hybrid approach of creating a jobs bill and offering tax cuts. The jobs bill would focus on bolstering infrastructure and manufacturing so that we do not continually outsource jobs overseas. The tax cuts would only be offered as an incentive to companies that hire new employees. Employers currently get a $1,000 tax credit for hiring new employees. This needs to be boosted since employers aren’t likely to take on a long-term, salaried employee for just $1,000.

What do you think is the best way to create jobs in the United States?

(Photo credit: The Cleveland Kid)

Mark Riddix
Mark Riddix is the founder and president of an independent investment advisory firm that provides personalized investing and asset management consulting. Mark has written financial columns for Baltimore and Washington, D.C. area newspapers and is the author of the book, "Your Financial Playbook."

Next Up on
Money Crashers

bearded man watching football game and making selfie with smartphone

Top 10 Places to Buy Cheap Discount Sports Tickets Online

From opening day to the playoffs, if you want tickets to any major sporting event, you may face some steep costs, especially if you...
Bank Account Promotions

35 Best New Bank Account Promotions & Offers – Jan 2019

It's possible to make $100s just by opening up a bank account. But sorting through the best offers can be tricky.At Money Crashers, we...

Latest on
Money Crashers

Sign Up For Our Newsletter

See why 218,388 people subscribe to our newsletter.

What Do You Want To Do
With Your Money?

Make
Money

Explore

Manage
Money

Explore

Save
Money

Explore

Borrow
Money

Explore

Protect
Money

Explore

Invest
Money

Explore