How to create jobs

@CNNMoney September 29, 2011: 10:46 AM ET

NEW YORK (CNNMoney) -- Congress is clearly divided on what needs to be done to jumpstart the ailing job market. But it seems that economists are fairly split too.

Of the 24 economists surveyed by CNNMoney, 16 believe Congress should take some kind of stimulative action to create jobs. But there's little consensus on just what that should be.

One option is an extension of the partial payroll tax holiday for employees and a new holiday for employers designed to benefit small businesses -- 11 of the 24 economists who participated in the survey picked that key element of the Obama administration's jobs plan.

"Payroll tax cuts offer a fairly attractive 'bang for the buck,'" said Russell Price, senior economist of Amerprise Financial. "This is particularly important right now given our contradictory needs for economic stimulus and spending restraint."

The second most popular choice among economists was to repeal Obama's health care reform and roll back the financial services regulation under the Dodd-Frank bill passed last year.

"To achieve a more sustainable impact on the job market, a reduced burden of regulation would significantly help business confidence," said Lynn Reaser, chief economist at the Fermanian Business & Economic Institute, who picked that as her second choice, behind more federal aid for states and local governments. "Funds to prevent layoffs of teachers and other public workers might have the greatest immediate impact."

Several of the economists think getting rid of those regulations would have the least impact on hiring.

"I don't think 'Obamacare' is as big a problem as most Republicans think. And Dodd-Frank is a mess, but it is a problem for financial markets more than labor markets," said David Wyss, senior fellow at Brown University.

The third most popular choice was spending on public works, which is also part of the Obama jobs plan. But again there is a widely split view of its effectiveness.

Help for state and local governments and giving businesses an immediate write-off of what they spend on capital spending produced similar mixed results. To top of page

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