President Obama is about to announce a program to stimulate job creation in the U.S. The program will probably consist of extensions of tax cuts and unemployment benefits, aid to States, and new spending on U.S. infrastructure. Here’s another way the government might “prime the economic pump.”
The government has several programs, especially in agriculture, in which they support the economy by buying excess production. Why don’t we extend that concept by having the government buy consumer goods produced entirely in the U.S. by Americans working for U.S. companies? The products could be distributed in underdeveloped countries in place of some foreign aid. Examples might include food items, medicines, recreational goods like soccer balls, hand-crank radios, DVDs, well pumps, and so on. It would be like the military aid we provide foreign governments only instead targeted at their local populations.
* This idea isn't meant to replace President Obama's jobs initiative. It's another tool the country might use to help stimulate job creation. This would be a long-term endeavor similar to the program used successfully for agricultural products.
* The problem with job creation is that there is no demand because the middle class has no money to spend. By artificially creating some demand for products, primarily from smaller companies, we would also be establishing conditions under which those companies could hire.
* The program might involve companies applying to the General Services Administration Federal Acquisition Service for a contracting mechanism, which the State Department could use to order products and deliver them to appropriate countries.
* With a government contract in hand, companies would be less uncertain about future demand, and as a consequence, be less reluctant to risk hiring new employees.
* Soldiers in Iraq and Afghanistan could be one means of product distribution as a way to connect with the local populace. It works with candy bars, why not soccer balls?
* Products would be a bit more difficult for tribal chieftains, warlords, and other corrupt leaders to steal, at least compared to the pallets of money we’ve sent in the past. They would also have to store the products. And really, how many soccer balls does a warlord need?
* We wouldn’t distribute any product a U.S. company sells in the country, so we wouldn’t compete with ourselves.
*This approach may be a good adjunct to tax cuts because it would ensure that purchases are made for "Made in America" products, and not just any product.
* Because products would have to be manufactured in the U.S., companies could not import cheap products from overseas and sell them at a profit.
* The program could also be used to encourage minority and small business startups. Merchants on etsy.com could actually sell some of their inventory.
* If the program was successful it could be expanded to include commercial and industrial products.
* We would be able to use all those “Made in America” labels we have sitting in warehouses across the country.
So, what innovative ideas for stimulating the economy do you have?