Maastricht Treaty revisions needed?

[kandrathe]

Obviously stimulus will be spent in states, on things that states might otherwise, in an alternate reality, spend money on. Restricting the stimulus entirely to federal jurisdiction would be stupid - you'd miss the vast majority of projects that might actually help, at the state or local level. Whether or not that enormous list breaks down as you claim it does is beyond my patience to figure out - I strongly suspect it doesn't, but I can't be bothered to add up all the stray millions.

However, those are quite specifically stimulus projects, things that states would not have done, or would have deferred. They are discretionary expenses. One does not need to be "bailed out" from something you have discretion to spend money on. I don't mean to split hairs, but the money spent keeping states solvent is money spent on their obligatory expenses, not their optional ones. No state is (with their own money) embarking on new infrastructure while they can't pay their employees, or cover their debt service. Indeed, this is the whole point of stimulus - to counteract contraction. Without that money, states are paralyzed, and that means a lot of potential jobs that simply never exist.

I see most of the big stuff is not discretionary, and not really stimulus (from my understanding of what grows an economy). Like, a 13% increase in payouts for food stamps doesn't really grow the economy, other than that people can still eat food (a desirable thing). Optimal stimulus spending is at least two sided, where the money employs someone who is out of work to build something that contributes to the productivity of everyone, like a fast freight line from St. Louis to NYC. Much of what can even be considered stimulus here is one sided, in that it creates some work for someone, but won't help grow the economy.

Poverty is a primary results of un- and under-employment. Focusing on how to get most people, who are able, employed at a rate above the poverty level will resolve the problem of poverty. We live in a global market. There is no reason why we can't get close to full employment in the US, if we would allow it.

I'm still not hearing very much "how" in there. If you have a simple solution (how to "allow" unemployment and poverty to vanish, as if it were so simple), you have several Nobel prizes headed your way, not to mention honorary doctorates at every Econ department in the world. But, of course, I don't think you have one.

Or, put another way, unemployment is currently 5% over full employment, with another few % discouraged from entering the job market. That's millions of job seekers with no jobs. Can you really solve this problem?

Yes, its solvable. If you want to do it quickly, put a short term moratorium on the minimum wage. This would at least get people into the rhythm of working, and improving themselves. Next, create gentle incentives for people to improve their skills and training, such as a tax deduction for qualified training and schooling. Incent employers to also grow their employees skills, and you might set standards for literacy, and skills testing for completing high school. If you don't pass the tests, you don't get a high school diploma. A unintended consequence of setting the bar higher, is that people actually will stretch to get over the bar.

Ok, then we need to work on the incentives for growing more businesses. Have the SBA, work with banks to create many regional incubators, and focus on creating many new innovative start up companies. This would have been a tremendous use of at least a couple of those billions. This is not rocket science. If you want more people employed, create more employers, and help the current ones to grow bigger such that they need to employ more people. Next, go to Denmark, or Hong Kong, take notes on how their government gets out of the way of business.