Red Ink Watch: Working on Jobs

" At the job. There's a new urgency for a job creation here in America as we learn that Canada and Australia on miles ahead of us. So there's talk of more stimulus measures but question. Will extending jobless benefits whole cobra coverage create or save jobs. Stephen Davis is the what -- from international business and economics at the University of Chicago professor let's festival -- this concept of saving versus creating jobs. You say that the idea of saving jobs which the Obama administration claims is a fonts and background."

" No I haven't had the farce. -- I think it was a clever. Decision early on. In the Obama administration. To prepare themselves for the possibility that jobs would continue to fall. After the institute of fiscal stimulus. So you can't prove that you've saved jobs so it's not a political manipulation kind of thing. Yeah -- used the word manipulation I think it's it is very difficult to determine how many jobs were. Created or saved. -- by the stimulus program. The administration economists I think understood that. Going into January February. And they also recognize the possibility that jobs might continue to fall. So they basically didn't want to be blamed for not create any creating jobs so. They said all right well maybe we save jobs things would have been even worse but for the stimulus. I can basically the airline. That -- what do you agree that I mean all we better off with the stimulus big Time Warner. More let me put it this way I think down there's a tremendous amount of uncertainty. Within the profession. About how big the impact of the stimulus. On jobs has been. All this discussion of fiscal multiplier is. That is a key determinant of the impact. Of fiscal stimulus. And we really don't know how big or small with the fiscal multiplier is."

" What they're talking about now. Is the idea of extending cobra extending unemployment benefits. A significant period of time. Maybe also extending and giving more money to Social Security recipients as a kind of a one off shot extend my homeowner's tax credit. Do you think that any of those marriages will walk. To create jobs."

" Well at least. Right look let me start with the -- extending enhanced unemployment insurance benefits I basically think that's a bad idea for two reasons. First it's a very expensive. Type of fiscal stimulus. Their estimates out there that extending unemployment insurance benefits. For another year would cost as much as a hundred billion dollars -- secondly it doesn't put people back to work. The incentive to return to work quickly is diminished. If unemployment benefits are made more generous that's just that that's just a fact about. The nature of the system. So I think I think the government would be wise to look to other types of changes. That won't break the budget and it will actually encourage people to go back to work and that will encourage employers. To make -- kind of investments that are necessary for job creation but professor Davis University of Chicago thanks for joining us we appreciate it thank you. Thank you --"