President Obama addressed the nation just under two (2) weeks ago with his somewhat vague proposal for creating new jobs in this country. Since then as details of President Obama’s jobs plan have emerged it is clear that the President just doesn’t get what it takes to create jobs in this country, or anywhere else in the world for that matter.
President Obama called for a $447 Billion jobs stimulus program. The Obama Plan focuses on temporary tax breaks for employers and infrastructure spending. (A more detailed look can be found in this WSJ Article ‘Obama’s Bid to Spur Growth‘) Since then his claims of the jobs program being paid for primarily with spending cuts and minimal tax increases has proven to false and hollow. Nearly 100% of the spending in the Obama proposal is to be paid for by tax increases that take effect in 2013, well after the 2012 election. On Friday, WSB radio reported that the Senate Democrats probably won’t schedule a vote on his proposal until late October, at the earliest, because many Senate Democrats don’t want to be on the record as having voted for the proposed tax increase.
President Obama’s Jobs Plan has another serious flaw; any near term temporary tax cuts are not going to motivate any employers to hire people and commit to the long-term expense of employees for temporary tax cuts today and vague, and somewhat worthless, proclamations by our President that unemployment will be lower in the future.
Another problem with this is that infrastructure projects have very long preparation cycles, sometimes stretching out for years, before any real work can begin on projects. The idea that suddenly advancing the bidding schedule for road and bridge work is going to boost the economy is ludicrous. Anything put on the bidding calendar today, will be lucking to see work start in 2012 (For those who are unfamiliar with the process, state and local government construction contracts are normally subject to a long and complicated competitive bidding process involving private contractors.)
Another very serious flaw in President Obama’s proposed jobs plan is that raising taxes is going to further hurt economic growth. A basic rule of economics 101 is that the more you tax something, the less of it you get. Increasing taxes on the private sector will only further reduce the growth of the private sector. If President Obama were to succeed and raise taxes in the manner he is seeking, he could very easily push a weak economy back into a recession or depression.
By now it should be clear to all that President Obama’s jobs plan is a failure at the launching pad that would do far more harm than good. Our country and economy is not based upon a system of command and control from Washington DC, but upon a system of free enterprise by the private sector that performs best when the government is the least involved in our lives.
To badly paraphrase that old Cracker song from the early ’90s; What the US needs now is less Obama and a new kind of Reagan.