Left In Lowell

Mass Economy…2x National Growth

4 Responses to “Mass Economy…2x National Growth”

1. Bob Forrant Says:
   July 30th, 2010 at 6:34 pm

   The stimulus helped - no question. But the big problem remains that while the state economy is growing at a quite faster clip than the country, the Commonwealth is not yet generating nearly enough new jobs for those young people entering the labor market for the first time! To accomplish this AND create new jobs to replace those that have disappeared over the last few years will be a very slow going process. Firms that are beginning to grow will do so by deploying technology and ading hours to existing workers. Both solutions do not require health insurance and vacation pay and additional wages. And, these solutions are an expression of the concerns the private sector has on the crazy quilt way federal and state policy have dealt with economic reform.

   In this region we need to be much more clever and purposeful about linking our educational institutions, manufacturers, inventors, and venture capital to really get at green energies, medical devices, assisted living technologies for our aging populations, and efficient health care delivery.

   Lowell has a quite powerful educational complex when you add in LHS, Greater Lowell Tech, Middlesex CC and UMass Lowell. Much much more can be done linking these institutions, aligning curricula far better than exists today, and seriously working on providing jobs for young people. The more this complex is gutted by budget cuts, the more tuitions rise to shut kids out, the longer a sustained recovery will take.

2. joe from Lowell Says:
   July 30th, 2010 at 10:54 pm

   Tax cuts are stimulative, Lynne, especially those for lower-income earners. They can be counted on to put any money they have back into the economy and produce a multiplier. It’s upper income tax cuts that are inefficient as a stimulus measure.

   I think this is a telling anecdote: the administration’s economic advisors reported that tax-based stimulus measures are most effective at stimulating the economy if they are less-visible. The Bush-style “I’m so awesome!” rebate checks were much more likely to be saved, used to pay off debt, or otherwise put to uses other than consumer demand. On the other hand, a few dozen more bucks in each paycheck, even if the same amount, has a high velocity into the economy. So, the middle- and lower-income tax cuts in the ARRA were deliberately implemented in a way that didn’t draw attention to themselves, thus costing the administration and Congress some attaboys, because it was better policy to make them less noticeable.

3. Lynne Says:
   August 1st, 2010 at 3:55 pm

   We’re much better off in ANY case, creating a spending program rather than make any tax cuts. We get more money on the dollar for spending money on public works or other programs than we ever would get with a tax cut at any level. So for efficiency’s sake, forget tax cuts, they won’t ever be as good.

   Second of all, scale. A tax cut for the lower income is what, maybe, $100-300 a year. Yeah, that’s a ton of money to flush into the economy. Wanna know what poorer people are doing with any extra money right now? Paying down debts. Even the subtle moneies (trust me). That money then gets locked up by the banks who aren’t lending.

   http://www.bobcesca.com/blog-archives/2010/07/stimulus_vs_tax.html for some numbers from Moody’s.

4. joe from Lowell Says:
   August 2nd, 2010 at 8:43 pm

   It’s true that even the best, lowest-income tax cuts can be less stimulative than certain types of government spending. However, tax cuts have one big advantage over government construction programs - they’re a lot faster. A hundred million people start getting higher take-home pay the Friday after a tax cut passes, as opposed to a construction project, which takes at least a couple of months before anyone starts earning extra money.

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