Blinder: Fiscal Fixes for the Jobless Recovery

Alan Blinder says "the fiscal cupboard is not bare":

Fiscal Fixes for the Jobless Recovery, by Alan Blinder, Commentary, WSJ: Do you sense an air of complacency developing about jobs in Washington and in the media? ... The Brookings Institution's Hamilton Project ... estimates ... the "jobs gap" ... is 9.9 million jobs. ... So any complacency is misguided. Rather, policy makers should be running around like their hair is on fire. ...

The Federal Reserve has worked overtime to spur job creation, and there is not much more it can do. Fiscal policy, however, has been worse than AWOL—it has been actively destroying jobs. ... So Congress could make a good start on faster job creation simply by ending what it's doing—destroying government jobs. First, do no harm. But there's more.

Virtually since the Great Recession began, many economists have suggested offering businesses a tax credit for creating new jobs. ... You might imagine that Republicans would embrace an idea like that. After all, it's a business tax cut... But you would be wrong. Maybe it's because President Obama likes the idea. Maybe he should start saying he hates it.

Another sort of business tax cut may hold more political promise. ... Suppose Congress enacted a partial tax holiday that allowed companies to repatriate profits held abroad at some bargain-basement tax rate like 10%. The catch: The maximum amount each company could bring home at that low tax rate would equal the increase in its wage payments as measured by Social Security records....

My general point is that the fiscal cupboard is not bare. There are things we could be doing to boost employment right now. That we are not doing anything constitutes malign neglect of the nation's worst economic problem