U.S. companies and banks need to dip into their massive cash stockpiles and invest while small deficits in infrastructure spending coupled with more training programs can make a dent in high unemployment rates, says former President Bill Clinton.
Furthermore, policy makers should consider enticing companies keeping money overseas to avoid U.S. taxes to bring it back home and put it into an investment bank to develop infrastructure projects here, which could create even more jobs and improve the quality of the U.S. economy, the former president adds.
"We've got some assets that aren't fully tapped with potential to really rebuild the manufacturing sector," Clinton tells CNBC.
(Getty Images photo)
"There's lot of money out there in the banks and in corporations that haven't yet committed either to their shareholders or employees or to overseas investments. What we are trying to do is find areas of opportunity that exist now, assuming no significant changes to public policy, that could lead to more investment and to more rapid job growth."
Currently, there are 3 million jobs out there posted on want ads but corporations are having a tough time filling many of them.
The public sector could help out by facilitating money to those corporations to train employees, which would lower unemployment without increasing spending, since all money used would come from previously allocated sources.
"What can we do to make it easier for employers to find people and to receive assistance to train them on their own before they make the commitment to hire them full time? I think if we can cut that gap we could hire another couple of million people, and that could lower the unemployment rate, increase the confidence rate and get investment going."
Green initiatives can also fuel hiring and economic growth, as retrofitting homes and buildings to make them more energy efficient can save money and create jobs.
"The other thing that I think we could do in a hurry is to provide adequate financing to be repaid by building owners from savings in utility rates to retrofit buildings," Clinton says.
"The unemployment rate in construction is twice the national unemployment rate in some places three times and you can't build houses and not many commercial buildings are being built, so we ought to put these people to work retrofitting buildings and let the owners, who themselves are cash strapped, pay it back from their utility savings," Clinton said.
"All you have to do is work out the financing."
A Modest Deficit
Developing infrastructure is key to creating construction jobs and lowering unemployment, even if it means spending a little more up front.
"I don't mind it when the government runs a deficit that's a modest percent of our income to invest in infrastructure because they have enormous paybacks over a 30-year or sometimes a 50-year time span, and we are only investing 2.5 percent of our GDP infrastructure every year, about half what the Europeans invest and less than a third of what China is investing every year. It's a terrible mistake," Clinton says.
One way to boost such spending would be to consider enticing corporations to bring money stashed overseas back home via tax breaks of some kind.
That money could go to an investment bank to develop infrastructure and alternative energy, which ultimately creates more manufacturing-level jobs.
"I think there are enormous jobs there, and every manufacturing job you create tends to create more than two other jobs in other sectors of the economy, and it makes America more competitive and more productive," Clinton says.
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