Spring Break
Creative idea for a Keynesian stimulus package
Issue date: 12/4/08 Section: Opinion
So, here is my humble idea - kill two birds with one stone. Instead of throwing money at bridges to nowhere or to bailout states that have been fiscally irresponsible, why not address the stimulus package to reform/strengthen the American educational system?
Here is how it would work. Create regional (I have not figured out the right size and number of institutions but for now my idea is as follows) massive hybrid technical and liberal arts universities. These universities work with corporations, small businesses, entrepreneurs, etc, to figure out what jobs are in the region, who is hiring and most importantly what they want, skill wise, out of workers. Any donation to the school from a corporation, or any entity is 100% tax deductible. The universities also coordinate internship opportunities on a greater scale than what we are accustomed to or have seen. Government is supposed to serve the people - this is a way of helping the market get what it wants and at the same time create massive stimulus through hiring professors, instructors, creating new buildings, new roads, sales of technology etc. Everyone gets helped.
You could also use the stimulus to help people pay for enrollment which would create a stimulus for people who are unemployed. The problem is how do you fund these institutions in the long run? So far in this plan we have already made any donations completely tax deductible. I would also suggest letting corporations take a tax deduction for any individual's education they pay for or sponsor.
Lastly, you could lower the corporate income tax and the small business income tax (I know they are two different tax categories) by 8% (or some other number), and allocate 2% of the corporate tax and business tax (Individual income tax of small businesses) income to pay for the schools. By cutting taxes on businesses, they have extra money to hire the workers they are partially paying for to train. You could also fund these programs through some sort of low rate consumption tax. If you wanted to make the consumption tax pigouvian you could tax video games and alcohol, things that make people unproductive, but that is just food for thought.
I'm not a Keynesian by nature but I think this stimulus package is an interesting idea that might work for three reasons: 1) it addresses long term growth and short term stimulus (it would be a fiscal shock), 2) it creates market transparency and 3) I think it would pass a cost - benefit test.
John Limberakis is a senior economics, political science an public policy triple major. He can be reached for comment at jlimbera@smu.edu.
Here is how it would work. Create regional (I have not figured out the right size and number of institutions but for now my idea is as follows) massive hybrid technical and liberal arts universities. These universities work with corporations, small businesses, entrepreneurs, etc, to figure out what jobs are in the region, who is hiring and most importantly what they want, skill wise, out of workers. Any donation to the school from a corporation, or any entity is 100% tax deductible. The universities also coordinate internship opportunities on a greater scale than what we are accustomed to or have seen. Government is supposed to serve the people - this is a way of helping the market get what it wants and at the same time create massive stimulus through hiring professors, instructors, creating new buildings, new roads, sales of technology etc. Everyone gets helped.
You could also use the stimulus to help people pay for enrollment which would create a stimulus for people who are unemployed. The problem is how do you fund these institutions in the long run? So far in this plan we have already made any donations completely tax deductible. I would also suggest letting corporations take a tax deduction for any individual's education they pay for or sponsor.
Lastly, you could lower the corporate income tax and the small business income tax (I know they are two different tax categories) by 8% (or some other number), and allocate 2% of the corporate tax and business tax (Individual income tax of small businesses) income to pay for the schools. By cutting taxes on businesses, they have extra money to hire the workers they are partially paying for to train. You could also fund these programs through some sort of low rate consumption tax. If you wanted to make the consumption tax pigouvian you could tax video games and alcohol, things that make people unproductive, but that is just food for thought.
I'm not a Keynesian by nature but I think this stimulus package is an interesting idea that might work for three reasons: 1) it addresses long term growth and short term stimulus (it would be a fiscal shock), 2) it creates market transparency and 3) I think it would pass a cost - benefit test.
John Limberakis is a senior economics, political science an public policy triple major. He can be reached for comment at jlimbera@smu.edu.
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