ABSTRACT
Bill Clinton learned quickly what the main issue of the 1992 campaign would be in the grim faces of New Hampshire's unemployed: jobs, jobs, and jobs. Although employment rose rapidly under Ronald Reagan, productivity grew slowly and real wages stagnated. European leaders in the mid-1980s envied the capacity of the less regulated US economy to generate new employment. During the transition, Clinton favored giving the economy a shot in the arm through a stimulus package, reducing recessionary unemployment from 7.5 percent to the 5.5-6 percent range through the creation of about 2 million additional jobs. Clinton believed in education, training, and other public investments as long-run solutions to the employment problem. But lower interest rates, not federal spending, had become the main vehicle to short-term jobs growth. The original plan called for about $50 billion to give the economy a jolt and push unemployment down quickly.
