Many Republicans complain that President Barack Obama’s jobs plan goes too far with fiscal stimulus. But former Federal Reserve Vice Chairman Alan Blinder says the economy needs a bigger stimulus program than what the president proposed.
“I would combine a fiscal stimulus package that’s highly targeted on jobs now, as Obama’s package was, with a very substantial long-run deficit reduction package,” Blinder, now an economics professor at Princeton University, tells Yahoo.
“You don’t want to raise taxes or cut spending now, but you want to bank it [deficit reduction] in the sense of legislating it.”
The 2009 fiscal stimulus package didn’t have better results because it wasn’t focused tightly enough on jobs, Blinder says.
Two policies that hone right in on creating jobs are a new jobs tax credit, “a weak version of which is in Obama’s package,” Blinder says.
There’s plenty of infrastructure work that needs to be done across the country, he says. So people can be hired for that.
Some projects can be completed right away – “pothole filling, fixing up schools and other things that are crumbling,” Blinder says. Other projects, like building bridges, take more time.
Hedge fund legend George Soros agrees on the need for fiscal stimulus. Republican opposition to Obama’s stimulus plans has helped push the United States into a double-dip recession, he tells CNBC.
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