Today President elect Barack Obama addressed the news that 524,000 jobs were lost in December, and 2.6 million jobs were lost last year by calling for the passage of his economic stimulus plan.
“524,000 jobs were lost in December across nearly all major American industries. That means that our economy lost jobs in all 12 months of 2008, and that the nearly 2.6 million jobs lost last year amount to the single worst year of job loss since World War II. The unemployment rate is now over 7 percent. Clearly, the situation is dire, it is deteriorating, and it demands urgent and dramatic action,” Obama said.
He tried to urge Congress to action by reminding them that the jobless are real people with families, “But let me be clear: today’s jobs report only underscores the need for us to move forward with a sense of urgency and common purpose. Behind each and every one of those millions of jobs lost there are workers and families who are counting on us as they struggle to pay the bills or stay in their homes. There are American dreams that are being deferred and that risk being denied. There is a devastating economic crisis that will become more and more difficult to contain with time. For the sake of our economy and our people, this is the moment to act, and to act without delay.”
Obama’s first and biggest test will be how he handles the Congress during the debate on the stimulus package. Republicans like the tax cuts, but aren’t so crazy about the spending, while Democrats love the spending, but are questioning the tax cuts. The truth is that 40% of the stimulus is going to be tax cuts.
Big infrastructure projects take time to develop and fund. Tax cuts are the fastest way to get money back into the economy. Even if the price tag on Obama’s plan is $800 billion, actual government spending would be closer to $480 billion. Obama is correct in saying that something needs to be done quickly, but as usual the Congress is being tempted to get bogged down in politics and appearances.
Psychologically it is important to hold under 10%, but I think that ship may have already sailed. If the number of jobless continues to rise at December’s rate, we should hit 10% unemployment by March. Obama faces the unprecedented tasks of turning around a recession while redeveloping an economy. The last thing he needs right now is petty partisan infighting, but this is what Congress does best.
I think we need the stimulus plan, and it needs to be very large, but Congress needs to make sure that it continues providing benefits in the long term, not just a shot in the arm for the short term.
The infrastructure spending will help keep the economy growing in the long term, but it would also be helpful if Congress could find a way to encourage businesses to invest in infrastructure as well. Possibly they could do this by making sure there are fewer unnecessary regulations that dissuade businesses from making those investments. There seem to be many businesses that have money to invest, but not as many that are actively investing in any forward-thinking enterprise. Hopefully Congress can find ways to get that money flowing.
The tax cuts on businesses would certainly be helpful, especially on small businesses or businesses in sectors where there is potential for significant job creation. We need the businesses like that to be able to resume their traditional role as the engine of our economy. The government can certainly assist the process getting started, but businesses will actually provide the growth.
I think the aid to the state governments is also needed, because the programs that the state governments support are needed for sustained growth. For instance, the state governments support schools and public workforce training programs. It is important to make sure both of those programs survive to make sure we are able to provide workers for whichever sectors of the economy are providing the jobs.
I recently saw that the Friends of the U.S. Chamber of Commerce is working with Congress to make sure that they take these things into account when they are designing the stimulus package. They have a petition that I encourage everyone to sign to make sure Congress knows that we want the economy fixed – but we want it fixed for the long-term – http://www.friendsoftheuschamber.com/takeaction/index.cfm?ID=76
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Require that all new vehicles sold in the United States be Flex-Fuel or Hybrid vehicles and THEN offer loans to US plants to re-tool in order to provide these vehicles.
Work to expand WI-FI technology and Smart Grid technology.
Set a simple tax code on all imports without reguard to country of origin or industry. A higher teriff on imports could fund more inspectors, more Immigration agents, more Border Patrol agents, more TSA agents, etc.
The Department of Treasury should take back control of printing and distribution of money and banking oversight by consolidating FIDC, the Federal Reserve Board, the Office of the Comptroller of the Currency, and the Office of Thrift Supervision functions.
Replace Amtrak with a system of rail lines owned and maintained by the government which private passenger rail companies can operate over.
End overlapping functions with the state governments. The federal government can offer oversight but infastructure prjects like roads, prisons, schools, etc. should not be a combination of local, state, and federal government money with competing EPA and other regulations. The government can vastly reduce it’s payrol by returning many functions to the state government and regulating state offices enstead of duplicating them.
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I remember wend I was a young man in Venezuela we want to have shirts and pants made in USA never cross to mine mind that one day as today, the most simple things required here in American and part of the world must be imported from China, Taiwan, Japan etc. and others countries that create jobless to this great country and encourage the new generation to accept it. My recommendation to the President of USA start doing our basic needs here, to enforce and create more jobs to provide ourselves and be free from cheap and poor quality products to get back our industry sector, be a leader in progress and research, I believe that a nation with not sacrifce and hard work will perish, please do not let this nation die we need and be a leader in technology and provide the simple things that the new generation can help the economy to grow, the simple things are part our lives every minute.
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