Thus far mediocre results have plagued the federal stimulus spending's record on job creation. Yale economist Robert Shiller has an idea: how about public works? Just use the government money to target projects that would provide a long term benefit to society -- the kind of thing that the government is supposed to do anyway. This argument might sound familiar. Here's an excerpt from Shiller's op-ed published over the weekend:
So here's a proposal: Why not use government policy to directly create jobs -- labor-intensive service jobs in fields like education, public health and safety, urban infrastructure maintenance, youth programs, elder care, conservation, arts and letters, and scientific research?
Would this be an effective use of resources? From the standpoint of economic theory, government expenditures in such areas often provide benefits that are not being produced by the market economy. Take New York subway stations, for example. Cleaning and painting them in a period of severe austerity can easily be neglected. Yet the long-term benefit to businesses from an appealing mass transit system is enormous. (This is an example of an "externality," which the market economy, left to its own devices, will neglect.)
Read the full story at the New York Times.