Bob Frank tells the Daily Beast that the government should spend to create jobs

8/10/2011 1:44:00 PM

The Johnson professor of economics says if jobs truly ARE job one of the government, then now is the time for significant infastructure spending

Excerpt from "How the feds can foster job growth" (Daily Beast, Aug. 10)
by Bob Frank, professor of economics at Johnson

Unemployment stubbornly remains above 9 percent because total spending is far below the level necessary to generate jobs for everyone. Yet Congress is poised to enact legislation calling for sharp cuts in federal spending, the immediate effect of which will be to increase unemployment still further. And that, in turn, will actually increase deficits in the long run.

The good news is that we could take simple steps that would put people to work right away while simultaneously putting the economy on a path toward a debt-free future. Our disinclination to take these steps has stemmed in part from our failure to recognize the astonishing cost of protracted joblessness. For instance, if only half of the more than 20 million people who are either unemployed or underemployed right now could find suitable work, national income would grow by more than 10 times the interest cost of the 2011 federal deficit. By a wide margin, attacking unemployment is a far more urgent task than short-run deficit reduction. MORE
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