Do stimulus packages really create and save jobs?
It is hard to tell with certainty exactly how many jobs are created or saved by any one particular spending program. Models provide good estimates, though there is a lot of debate in the economic community over the accuracy of these calculation formulas. The view of Keynesian economists is that governments can manipulate the overall level of demand for goods and services in an economy with adjustments in tax rates and government spending levels. Therefore, stimulating the economy by lowering taxes and increasing government spending will, under this theory, lead to an increase in employment. Other economists, however, claim that fiscal stimulus cannot be used to control activity in the economy. A serious problem for fiscal policy is that even if one accepts that it can in theory be stimulative, it is difficult to effectively employ in practice because of the lag time between when stimulus is needed and when the government can authorize and begin spending stimulus fund . In the past, sti
