Here in Spain, and in other countries I've lived in (Europe and South America), there's something called a Savings Bank (http://en.wikipedia.org/wiki/Savings_bank): a non-profit, regional/local state controlled bank. Good folks put their money in them and the savings bank invests it back into the economy for public good, social and cultural projects, and job creation - doing precisely what the OP suggests.
But savings bank are being dismantled in Spain now, and in many places like Brazil 10+ years ago. Why? Because politicians need money for their campaigns. Politicians control these savings bank. Eventually the savings bank money makes into the ruling parties friends pockets and financial supporters. Or into senseless investments, investments a private bank has a much lower probability of making since private banks have shareholders and higher stakes that make them much more accountable for their actions.
Government should not lend money directly. That's what banks are for. Government should not replace the private sector. Ever.
Government already has enough resources to incentive the job market: tax cuts for companies that hire new people. Deregulation of the market. Interest rates. Money printing. Hiring public workers. Starting public projects. Declaring wars in foreign countries.
Creating jobs with loans is currently available anyway: companies can show a plan to banks and investors, so they can decide to grant the loan or not based on things like risk and profitability for both parties. Risk aversion and accountability is something that Government overlooks considerably. Private loaning and investing is a very flexible system: the company may then chose to use the money to cut down on its work force, replacing people with robots. That's great, because it makes companies more competitive. That's more important down the road. Lending money, as the OP suggests, to companies so that they can just go out and hire is reinforcing a negative behavior: become less productive first, then see if you can catch up. That's just creating a country of sweat shops.
Recessions can actually be a positive thing for the economy when good, functioning companies (who have cash flowing) have better choice to hire great people (who became suddenly jobless). So don't inflate the job market artificially and mess it up for the well-managed companies and deserving people out there.
But savings bank are being dismantled in Spain now, and in many places like Brazil 10+ years ago. Why? Because politicians need money for their campaigns. Politicians control these savings bank. Eventually the savings bank money makes into the ruling parties friends pockets and financial supporters. Or into senseless investments, investments a private bank has a much lower probability of making since private banks have shareholders and higher stakes that make them much more accountable for their actions.
Government should not lend money directly. That's what banks are for. Government should not replace the private sector. Ever.
Government already has enough resources to incentive the job market: tax cuts for companies that hire new people. Deregulation of the market. Interest rates. Money printing. Hiring public workers. Starting public projects. Declaring wars in foreign countries.
Creating jobs with loans is currently available anyway: companies can show a plan to banks and investors, so they can decide to grant the loan or not based on things like risk and profitability for both parties. Risk aversion and accountability is something that Government overlooks considerably. Private loaning and investing is a very flexible system: the company may then chose to use the money to cut down on its work force, replacing people with robots. That's great, because it makes companies more competitive. That's more important down the road. Lending money, as the OP suggests, to companies so that they can just go out and hire is reinforcing a negative behavior: become less productive first, then see if you can catch up. That's just creating a country of sweat shops.
Recessions can actually be a positive thing for the economy when good, functioning companies (who have cash flowing) have better choice to hire great people (who became suddenly jobless). So don't inflate the job market artificially and mess it up for the well-managed companies and deserving people out there.