Alternative Public Spending: Effects on Job Creation

Floor Speech

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Ms. SCHAKOWSKY. Madam Speaker, last week's report of the February jobs figures--a net loss of 63,000 jobs--is yet another sign that we need to act to spur employment. We need to stimulate the economy and to create the good jobs that will help working families across the country achieve the American dream.

I would like to bring my colleagues' attention to a recent study that gives us new information on how to achieve that goal. The study, completed by economists at the University of Massachusetts-Amherst, evaluates the economic relationship between public spending and job creation. The study, ``The U.S. Employment Effect of Military and Domestic Spending Priorities,'' concludes that public dollars invested in health care, education, mass transit or construction for home weatherization and infrastructure create more jobs than investing an equivalent amount in either military or personal consumption through tax cuts.

The study evaluates the relative effects on job creation of investing an equivalent amount of federal dollars in three scenarios: (1) private consumption through tax cuts, (2) the military, and (3) domestic investments. This important study finds each billion dollars of federal funding would create: 10,799 jobs if spent on tax cuts designed to spur personal consumption; 8,555 jobs if allocated for military spending; 12,883 jobs if invested in health care; 17,687 jobs if invested in education; 19,795 jobs if invested in mass transit; 12,804 jobs if invested in home weatherization and infrastructure.

The bottom line is that public dollars invested in health care, education, mass transit, or construction for home weatherization and infrastructure create more jobs than investing an equivalent amount in either the military or personal consumption.

I hope that my colleagues will review this study, and I would like to thank the Women's Action for New Directions (WAND), the Institute for Policy Studies, and the Political Economy Research Institute at the University of Massachusetts-Amherst for their work in this area.

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