Tuesday, September 7, 2010

Jobless in Seattle...

 
The government has embraced an arrogant ideology. They claim to know the key to prosperity. It’s analogous to communism. They thought the same thing. The clever ones - themselves - would run everything. That’s the analogy. The key to prosperity is to let things run themselves. We’ll liberalize everything, let everyone look after himself, let business, not the state, run the economy. The state should have no views, no policies of its own. Just open it all up, step back, let it go and you’ll see how well everything will work if we just leave things alone. - Vaclav Havel
According to the employment record for August 2010, the situation wasn't as bad as the economists previously feared. Speaking from the Rose Garden after the report was released, President Obama said the economy was moving in a “positive direction", but unfortunately exceeding low expectations and making progress are not the same thing. 

"The economy is moving in a positive direction, jobs are being created; they're just not being created as fast as they need to, given the big hole that we experienced," Obama said on September 3rd. "We're moving in the right direction. We just have to speed it up."  (...) “There’s no quick fix for this recession,” Obama said. “The hard truth is that it took years to create our current economic problems, and it will take more time than any of us would like to repair the damage.”
Meanwhile, the jobless rate in the U.S. is likely to approach 10 percent in coming months as the economy fails to grow fast enough to employ people rejoining the labor force. 

The government's stimulus package failed to bring the results that were hoped for.  President, who managed to triple  the national debt during his first hundred days in office, claims that more money is needed. How much more? 

President Barack Obama is proposing to expand tax relief for businesses and boost federal spending on transportation to help boost the economy. During his Labor Day appearance on September 6th in Milwaukee,  Obama called for $50 billion in the first of a six-year program to repair roads, railways and modernize the air-traffic control system. 

Another proposal will be laid out on Wednesday, September 8. The new proposal that amounts to $100 billion would increase and permanently extend research and development tax credits for businesses, rewarding companies that develop new technologies domestically and preserve American jobs. It would be paid for by closing other corporate tax loopholes. The proposal has yet to be approved by the Congress. The GOP which opposes the bill will, most certainly, have to take the blame for obstructing President's efforts to revive the stagnant economy. 

"The White House is missing the big picture. These aren't necessarily bad proposals, but they don't address the two big problems that are hurting our economy - excessive government spending, and the uncertainty that Washington Democrats' policies, especially their massive tax hike, are creating for small businesses."  - House Minority Leader John A. Boehner (R, Ohio).

"The best that can be said about the new White House proposals is that they’re probably not as poorly designed as previous stimulus schemes. Federal infrastructure spending almost surely fails a cost-benefit test, but even bridges to nowhere carry some traffic. The money would generate more jobs and more output if left in the private sector, so the macroeconomic impact is still negative, but presumably not as negative as bailouts for profligate state and local governments or subsidies to encourage unemployment – which were key parts of previous stimulus proposals." - Dan Mitchell