Measures to directly create jobs have begun to occupy an important position in American economic policies. Most of these measures involve direct public service programs and employment subsidies. This paper explores the reasons for the emergence of such programs and notes that the economic rationale for these measures suggests a substantial potential for direct job creation measures--a potential involving increased employment, a lower inflation rate, and a more equitable income distribution. This potential is not easily attained, and the issues of displacement and administrative difficulties must be confronted. However, job creation measures have macro-economic effects (e.g., increasing the employment of low productivity workers) not easily realizable under alternative programs. Experimentation with various forms of direct job creation measures could serve as the basis for policies which meet both efficiency and equity goals. (Author/WP)