Obama's Rural Job Creation Plan May Simply Shift Resources

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If this rural physician is displaced from an urban or suburban area, Bronars said there may be one fewer physician in urban and suburban areas, which could lead to less revenue and fewer jobs where the physician would have otherwise been placed.

"The net impact of this program on jobs must account for both the increase in health services provided in the rural communities and the decrease in services provided in other areas," which will likely lead to lower job creation numbers, Bronars said.

And while encouraging physicians to care for the growing aging rural population may be sensible health-wise, it may do little to stem the tide of younger populations migrating to other cities, Bronars said. The latest Census figures released earlier this summer indicate that 16 percent of the U.S. population lives in rural areas.

"It is not just physicians who are unlikely to migrate to rural areas after completing their degree. Every year young people leave rural areas to acquire business, computer science, engineering and other technical degrees and then move to metro areas after completing their schooling," Bronars said. "Rural areas will face a challenge when looking for talented job applicants."

Phillip Swagel, former assistant secretary for economic policy at the Treasury Department from 2006 to 2009 and former chief of staff at the White House Council of Economic Advisers, said it may be "helpful" to remove obstacles facing rural hospitals as they seek to recruit doctors and purchase new IT systems.

He said the president's announcement is "more enhancement than new policies."

"It's akin to putting a new ribbon on last year's birthday present and using it as a gift again," Swagel said, describing only some of the proposals as "useful."

Swagel, now professor of international economic policy at the Maryland School of Public Policy, said access to information about job training is an appropriate response to the weak labor market, which faces a 9.1 percent unemployment rate.

But he said the announced programs to expand government loans for targeted projects seem less promising, in light of recent reports about the failure of similar programs in the stimulus bill.

He cited the bankruptcy filing by the solar panel manufacturer Evergreen Solar in Massachusetts this week, which was awarded $58 million in tax breaks and other state aid. Though the company did not take advantage of all of those incentives, the state is trying to recoup some of the money it did get, according to the Boston Globe. The company said it was unable to compete with Chinese competitors as prices of solar products dropped.

"In general it's not a good idea for the government to seek to pick winning sectors or technologies. This is better done by the private sector," Swagel said.

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