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Argument: 2009 US stimulus will create or save millions of jobs

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Daniel Gross. "Yes, We Can". Newsweek. February 5, 2009 - Newly elected Republican National Committee Chairman Michael Steele laid down the party line on CNN: "Let's get this notion out of our heads that the government create jobs. Not in the history of mankind has the government ever created a job." Sen. Jim DeMint of South Carolina succinctly summed up his opposition: "We can't keep spending and borrowing to get us out of a recession." Sen. Kit Bond of Missouri concedes that some government spending—such as spending on highways—can create jobs but thinks that spending on mass transit or alternative-transit infrastructure isn't stimulative.

These claims are so peculiar that it's hard to know where to begin. Contrary to Steele's assertion, in the history of mankind, the government has in fact created many, many jobs (including the one he held for a few years: lieutenant governor of Maryland). Today, government accounts for 22.5 million of the nation's 135.5 million payroll jobs, or 16.6 percent. Those numbers include people who work for the federal, state, and local governments—doctors and nurses in public hospitals and teachers at elementary schools and public universities. Government also has created—and continues to create—all sorts of private-sector jobs, for defense contractors, the aerospace industry, medical-device makers, real estate companies, and construction firms. The economy of the Washington, D.C., area has boomed in recent decades not so much because the federal government has expanded its payrolls massively but because private government contractors have been thriving. As the Bureau of Labor Statistics notes, in January, "the large areas with the lowest jobless rates in December were Oklahoma City, Okla., and Washington-Arlington-Alexandria, D.C.-Va.-Md.-W.Va."—a capital city, and the capital city.

Contra DeMint, borrowing and spending are pretty much how the government has pulled itself out of every modern recession. And contrary to what Bond argues, mass transit can be plenty stimulative. (Here's a report from the New York Times on the economic impact of the Second Avenue subway project in Manhattan.) For an example of how a little spending on mass transit might save jobs, Bond could look a little closer to home. The New York Times reported Wednesday on how St. Louis' inability to fund its bus system means hundreds of employees will find it impossible to get to work. In the case of St. Louis, several million dollars might help save a few jobs. That sounds defensive. But in a period when Americans are losing jobs at a furious clip, when the economy is shrinking rapidly, when monetary policy is near exhaustion, and when tax cuts aren't likely to work as they do in ordinary times, the highest priority is simply to stop the downward spiral.

"Obama: Stimulus will create 4.1 million jobs". MSNBC. January 10, 2009 - WASHINGTON - President-elect Barack Obama has called again for "immediate and dramatic action" to deal with the deepening U.S. economic crisis that has cost millions of Americans their jobs.

In his weekly radio and YouTube broadcast address on Saturday, Obama pointed out that he has taken the unusual step of working ahead of his Jan. 20 inauguration with members of his own Democratic Party as well as the rival Republicans to seek consensus on a plan to stimulate a recovery from the recession.

"If nothing is done, economists from across the spectrum tell us that this recession could linger for years and the unemployment rate could reach double digits — and they warn that our nation could lose the competitive edge that has served as a foundation for our strength and standing in the world," he said.

The president-elect said that a new analysis by his economic advisers indicated that his economic recovery plan "will likely save or create three to four million jobs."

Speaker Nancy Pelosi - "It will create millions of jobs, do so in a way that brings stability to the economy, does so to inspire confidence in people".[1]

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