The Broader Market

by Michael Ettlinger and Jordan Eizenga

Job creation isn’t going to get moving to the extent we need until there’s sufficient demand in the economy to get businesses believing that there will be good returns to investing and hiring. In short, they need customers. That said, at the margin there is something to be said for providing other forms of motivation to hire.

One way to do that is to create a “National Payroll Contest” that offers prizes to the firms that generate the greatest increases in payroll over the course of the year. It’s an admittedly quirky idea. But hear us out. It would be inexpensive, and if it worked it would help create jobs.

by David Min, Jordan Eizenga and John Griffith

The announcement yesterday that the Obama administration will consider proposals to sell off large numbers of government-owned foreclosed homes is an important step toward a new system of U.S. housing finance. If designed well, this initiative could generate much-needed revenue for the government, expand the quantity of energy efficient, affordable housing to thousands of American families, and create well-paying jobs.

Government-supported entities own hundreds of thousands of foreclosed homes, mostly from mortgages insured before the housing bubble burst. These owners include the Federal Housing Administration, Fannie Mae, and Freddie Mac. Most of these so-called “real-estate owned” or “REO” properties are currently unoccupied and losing value as they deteriorate.

The White House addressed this issue yesterday by releasing a public solicitation for proposals on how to deal with this growing stock of REO properties. Their goal is to reduce the number of foreclosed homes in a way that minimizes taxpayer losses, expands affordable housing, and addresses property repair and rehabilitation needs.

For more of this article, see here.

by Jordan Eizenga

Congress’s 11th-hour decision to raise the debt limit after agreeing to a $2.4-trillion deficit-reduction package may have averted economic calamity, but the United States is not out of the woods yet. The long-term effects of the protracted and fractious debt-limit negotiations, coupled with a deficit-reduction package that does nothing to put people back to work, tells me that we’re in for a rough ride. In particular, there are three things that concern me most going forward:

For more of this article, see here.

by Alon Cohen and Jordan Eizenga

The federal government is holding a significant number of foreclosed properties from mortgages it guaranteed before the housing bubble burst. The weak housing market would surely yield depressed prices if the government were to sell off these properties en masse. So what should we do with our growing stock of foreclosed homes? And can we put Americans back to work in the process?

Here’s what we propose: Institutions that hold tens or hundreds of thousands of these properties—both private institutions and those backed by the government, such as Fannie Mae, Freddie Mac, and the Federal Housing Administration, or FHA—should rehabilitate, retrofit, weatherize, and rent them or sell them to investors.

For the rest of the article, see here.

by Jordan Eizenga

What if I told you Congress could reduce student debt burdens, inject billions of dollars into the economy, create jobs, and do so without it costing a fortune to the federal Treasury? Well, Congress can do just that by expanding and modifying the Department of Education’s existing student loan rebate program.

Currently, 65 percent of all college students take out some form of debt for education-related expenses. The average debt level of students at the time of graduation is over $24,000. This amounts to average monthly loan payments of approximately $250 over 10 years. Clearly, these households are in a lot of debt, which is constraining spending and holding back our economic recovery.

by Heather Boushey and Jordan Eizenga

House Republicans introduced the Jobs, Opportunity, Benefits, and Services Act of 2011 or, as they prefer to call it, the JOBS Act of 2011, on May 11, 2011. To be clear, the JOBS Act, which provides an incentive for states to cut unemployment benefits, is less about creating jobs and more about hurting those who have lost one. The JOBS Act would greatly weaken an already fragile unemployment insurance system, jeopardize our still-fragile economic recovery, and provide undue hardship to millions of households. Congress should reject this legislation and instead focus on policies that create jobs and strengthen our economy.