La Follette School economists Andrew Reschovsky and Menzie Chinn shared their perspective on the federal jobs bill with the Milwaukee Journal Sentinel.
They and other economists say the measure before the Senate to give companies tax credits for hiring is too small to make a dent in a $14 trillion national economy.
"'There's no question it isn't enough, given the magnitude of the nation's economic problems,' said Andrew Reschovsky, an economist at the University of Wisconsin-Madison, who argues instead for an extension of unemployment benefits and additional federal help to states.
"He and other Wisconsin economists say the stimulus plan offers lessons for lawmakers to draw from to inform their next legislative steps - namely that federal interventions must be large and quickly disbursed. Of the $226 billion set aside for infrastructure projects, for instance, only $31 billion has been spent so far.
"Menzie Chinn, a UW-Madison economist, agrees with Reschovsky that extending unemployment benefits would be more effective than the Senate tax credit proposal because those who are out of work are likely to pump that money back into the economy." Chinn adds, however, that on a dollar-for-dollar basis, the tax credit might be more effective than extended unemployment insurance. He explores this line of thinking on his blog, Econbrowser.
Chinn also commented on the euro on CNNMoney.
The euro's Greek tragedy, February 19, 2010, CNNMoney.com
Senate job bill gives employers tax credits for new workers, February 21, 2010, Milwaukee Journal Sentinel
Policies for Increasing Economic Growth and Employment, January 18, 2010, Econbrowser