Government Stimulus Package Unlikely to Result in Job Gains in Near Term

Jan. 12, 2009

Story Contact:  Jeffrey Beeson, 573-882-9144, BeesonJ@missouri.edu

COLUMBIA, Mo. – Standing at a 16-year high, the nation's unemployment rate reached 7.2 percent in December, losing 524,000 jobs, according to the Bureau of Labor Statistics. Joseph Haslag, professor of economics and director of the Economic Policy Analysis and Research Center at the University of Missouri, says that the federal government should focus on programs that are needed and that will expand the nation's productivity capacity.

"What the U.S. government does best is purchase public goods that expand our quantity of goods and services that our nation produces," Haslag said. "For example, when government money is utilized to fix highways, jobs are created and citizens driving on the new roads will save money on gas and car repairs."

In Missouri, the unemployment rate has stayed nearly even with the national average, which Haslag expects to remain constant.

“Although things will still be bumpy for about six months, we are starting to see the ‘seeds’ in place for a recovery,” Haslag said. “Reports have shown that the savings rates are increasing, which will allow banks to strengthen their assets and start making loans to solid prospects once again.”

Haslag joined the MU Department of Economics in 2000. He holds a doctorate from Southern Methodist University (1987). Haslag previously worked as an economist at Federal Reserve banks in Dallas, Atlanta, Kansas City and St. Louis.

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