Will a $600 rebate check equal 600,000 jobs?

U.S. Treasury Secretary Henry Paulson said that the $600 rebate checks may create hundreds of thousands of new jobs. According to a Reuters report: "We know they're going to be helpful," Paulson said on CNN television. "These checks should be a big part of adding 500,000 to 600,000 additional jobs this year."

How can $600 create 600,000 jobs? With consumers pouring $168 billion back into the economy from these checks, the actual effect this will have on the economy could be double that amount. While no one can start a business on $600, the cumulative effect of 130 million Americans spending these checks will certainly add many to the employment rolls. I am not sure if you can pinpoint a number, but the rebate will definitely help.

If the government is going to get involved in trying to stimulate the economy, outside of tax cuts, this is the best way. Let individuals make the spending decisions that they think they need to make. This will prove to be much more effective than having the government funnel billions of dollars to some project. That method has been proven to be a black hole, as the government sends more and more money, while the bureaucrats claim it's not enough and ask for -- and get -- more. And the problem never gets fixed.

Let's see how accurate Paulson's projection will turn out to be.

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. DISCLOSURE: Writer's fund has no position in any stock mentioned, as of 3/28/08.