Just abut every conversation I’ve had with a Democratic elected official or staffer in the past few weeks came around to the same urgent question. And, no, it was not about health reform. It was about jobs. When, they ask with more than a hint of panic in their voices, will the jobs come back?

These lawmakers, with an uncanny instinct for political self-preservation, recognize that 10 percent unemployment this time next year will be an electoral death sentence. That’s why they are increasingly talking about the need for a new economic growth package. White House aides, who have been fueling the fire, insist this won’t be a new stimulus, just an extension of an old one.

Semantic sleight of hand notwithstanding, such a package would mean hundreds of billions of dollars in new government spending and tax cuts. Some will be aimed at boosting demand (extending and expanding the home buyer tax credit), some will be essentially humanitarian (extending unemployment benefits), and some will be explicitly intended to encourage hiring (an employment tax credit).

I’ve written recently about expanding the housing subsidy—a singularly bad idea. But it has been a while since TaxVox looked at the jobs credit. My post last January set off a fascinating debate about the benefits of a similar effort in the Carter Administration. The consensus: About two-thirds of the 2.1 million jobs created by the Carter credit would have been produced anyway.

Tim Bartik and John Bishop, both of whom have written extensively on Carter’s New Jobs Tax Credit, argue it nonetheless created 700,000 new jobs in a year—not bad, even if a lot of money was wasted. Others insist the research they used is flawed.

President Obama’s updated version died in last winter's stimulus debate amidst questions about its cost and design. Could he retool the plan for a Stimulus Redux?

There are lots of questions. Is the original $3,000 credit enough? Is it prudent, given a $1.4 trillion deficit, to make it more generous? Should it be refundable? If so, at least some of the money will end up in the hands of businesses that are doomed to fail (haven’t we done enough of that lately). On the other hand, why should a deficit-ridden government subsidize profitable firms that would be hiring anyway? 

The most interesting issue may be timing. In the depths of the slump last January, it was hard to imagine businesses hiring, even with a credit. Now, as the economy recovers, are employers closer to rebuilding payrolls? Would a credit now tip the balance? Is all the chatter about a new credit perversely delaying some hiring?

In a very nice story last week, Lou Wilin of the Findley Ohio Courier asked employers in his hard-hit state whether the credit would encourage to them to hire. Overwhelmingly, they said no: "People do not staff plants based on tax credits," said Jed Osborn, plant controller for Ball Corp. "You just do not hire people to stand around," Osborn said. "They have to have a reason to be there."

That’s why my preference is to let the first stimulus run its course (at least 60 percent has yet to be spent). That should boost demand for goods and services which, in turn, should revive the job market. The most important long-term step Washington could take may be to fix the health insurance system—currently a huge disincentive to hiring new workers.      
      
Unfortunately for rattled Democrats, repairing the fundamentals will take time. And I understand why they don’t want to wait. But a jobs credit isn’t going to save them.