Tuesday, February 19, 2008
Report Finds "Economic Stimulus Good, But More Needed"
To view the full report, visit http://www.communitysolutions.com/images/upload/resources/EconomicStimulusMoreNeeded021508_2.pdf
Wednesday, February 06, 2008
“The State of the State is Resolute”
Governor Strickland gave his State of the State address today. He focused primarily on education and economic development. He spoke of investing in Ohio’s future through an educated workforce, infrastructure, and emerging industries.
Education – To create a more educated workforce, the Governor has proposed a 10-year plan in which associates and bachelors degrees will be available within 30 miles of everyone in the state. He also put forth the ‘Seniors to Sophomores’ initiative, where, starting next school year, high school seniors will be able to earn college credit at Ohio’s public universities - for free. He also proposed creating the position of Director of Department of Education to oversee K-12 education. The position would be appointed by the Governor. Governor Strickland will offer his full education plan next year based on his stated principles.
Economic development - Creation of good jobs, infrastructure investment, and investment in emerging industries like biomedicine and advanced/renewable energies to stimulate the state’s economy and maintain Ohio as a strong industrial base. ‘Building Ohio Jobs’ would invest $1.7 billion (funded through restricted bonds) to create 80,000 good jobs. This would be done through advanced and renewable energy, distribution infrastructure, bioproducts with renewable sources, biomedicine, downtown revitalization, Clean Ohio Fund, and the Ohio Public Works Commission.
Other issues - Governor Strickland wants to create the Ohio Department of Veterans Affairs to consolidate veterans’ programs. He also would like the legislature to keep electricity rates stabilized as part of the Energy Jobs and Progress Plan. He addressed the foreclosure crisis with plans to implement rules and possible legislation that incorporate elements of the compact that Ohio offered to mortgage companies, which they declined.
The Governor seemed to respond to suggestions that he wait until next fiscal year to begin cutting budgets by emphasizing the need to be proactive and plan for the future. Overall, he showed commitment to investing in the things that add promise to Ohio’s future, even during fiscally tight times.
Monday, February 04, 2008
Economic Stimulus: Bang for the Buck
Unfortunately, in the rush to build consensus on a stimulus package, Congress jettisoned an important method of stimulus that has the potential to be most effective: direct government payments to individuals, which could come in the form of an increase in food stamp benefits or an extension of unemployment insurance. Not only would an increase in these programs provide much-needed support to low-income families, who are likely to feel the impact of an economic downturn most deeply, but according to economists, they would provide the swiftest impact on the economy.
When measuring “bang for the buck”, or how much economic activity is generated by spending on certain policies, food stamps and unemployment insurance come out ahead, according to the industry research firm Moody’s Economy.com. For every dollar spent on the food stamp benefit, $1.73 is generated throughout the economy in what economists call the ripple effect. $1.64 is generated for every dollar spent on unemployment insurance. And unlike tax breaks, which individuals may use to pay down debt or increase savings, recipients must spend additional food stamp benefits, quickly infusing money into the economy.
In testimony before the Senate Finance Committee, Peter Orszag, Director of the non-partisan Congressional Budget Office stated, “The most effective fiscal stimulus polices share two common features: they focus on the time period when stimulus is most likely to be needed, and they are designed to increase economic activity as much as possible for a given budgetary cost.” He went on to site food stamp increases and unemployment insurance extensions as the only two proposals currently being considered that are both fast acting and highly effective stimulus.
It appears unlikely that food stamps and unemployment insurance will be a part of the first stimulus package sent to the President. There are rumors that a second round of stimulus will be considered later in the year. Let’s hope that the passage of a bill does not mark the end of the discussion.
 “Food stamps offer best stimulus – study.” CNN Money.com, 29 January 2008.
 Statement of Peter R. Orszag, CBO Director, “Options for Responding to Short-Term Economic Weakness.” Before the Committee on Finance, United States Senate, 22 January 2008.