Can a hiring tax credit create 15 million new jobs?

It's hard to believe, but there are now 15.1 million people out of work. The $787 billion stimulus plan was supposed to "save or create" 3 million jobs, but there's little evidence that plan is having much of an effect. The sad thing is that even if those jobs were actually created, it would not be enough to make up for all the jobs lost in the recession.

However, something new is on the horizon: a tax credit to encourage small business to create new jobs. DailyFinance's Mark Cohen wrote about this last month, wondering why the government isn't using the tax code to help create new jobs. Now The New York Times reports that a growing number of experts and politicians, including 2006 Nobel Prize winner Edmund Phelps, are promoting a two-year tax credit for small businesses that increase the size of their work force or make part-time workers full-time. The tax credit -- which would amount to twice the first-year payroll tax for each new hire -- could be worth thousands of dollars per new job.