WASHINGTON, D.C.—President Obama’s latest swing of the bat to get the economy growing again looked a lot like his previous attempts when he couldn’t make a base hit.
He’s had nearly three years to score in an economy that remains in a recession, but has struck out repeatedly, losing voter confidence and raising doubts about his chances for reelection in 2012.
Even the liberal New York Times called his nearly $500 billion jobs plan a “mix … of extensions and expansions of existing policies,” with a few new ideas thrown in to hoodwink voters into hoping that this one could be a home run. Don’t hold your breath.
“The plan—for the most part—is a conventional stimulus, much like the one passed at the beginning of the President’s term,” says the Washington Post.
If all the previous infrastructure spending and temporary business payroll tax cuts didn’t work, why would more of the same yield a different result? Especially when his latest scheme costs about half of what was spent on the 2009 stimulus.
If you’re keeping count of what Obama’s economic stimulus experiments cost, the number’s somewhere near $1.5 trillion, all of it adding to the debt, and very little of it producing the jobs he said it would. In fact, the economy’s gotten much worse, with zero net new jobs created in August, and the economy barely growing at 0.8% this year.
The plan he proposed last week before a joint session of Congress failed to excite Wall Street or the stock market, which has been in a nosedive, failed to move his job approval scores, which are running about 40%, and failed to boost the country’s depleted confidence in his presidency.
Nearly three-fourths of Americans now say the nation’s economic outlook is “getting worse,” according to the latest Gallup Poll.
In his overinflated rhetoric, Obama made the plan sound like the Second Coming. But nothing in his plan, even if it were to become law, would have much of an effect this year or next.
His $140 billion in infrastructure spending would take a long time to get into the contract pipeline, with no permanent impact on job creation.
Republicans like parts of his $245 billion in payroll tax cuts, which would extend this year’s employee tax cut for another year, lowering it to 3.1% in 2012, and cutting the 6.2% payroll tax that companies pay to 3.1%. Still, the tax cuts would rise to their former higher rate at the end of next year, hitting workers and businesses at a time when the economy may still be sluggish.
But there’s little if any GOP support for Obama’s micromanaging plan to offer a payroll tax holiday for businesses that hire more workers or give their existing employees raises, or give tax credits of up to $4,000 to employers who hire people who have been out of work for more than six months. Jobless for five months? Sorry, pal.
In a survey by the New York Times, many firms said their hiring depends on their sales, not on tax credits. “Business demand is what drives hiring,” said the owner of Nutsonline, an e-commerce nuts and dried fruit company in Cranford, N.J. Others said that all too often the tax credits go to businesses who were planning to hire anyway.
An official of Chesapeake Energy, a major explorer of oil and gas, said the Obama tax credit “does not drive our hiring.” Another, Roger Tung, chief executive of Concert Pharmaceuticals in Lexington, Mass., said the credit wouldn’t cover the costs of hiring one additional employee after benefits were figured in. Hiring would pick up only when investor confidence grew so his firm could raise more capital,” Tung said.
But capital is not in Obama’s vocabulary. Republicans who favor permanent income tax cuts for businesses, individuals and investors say that Obama’s economic policies have failed in part because they are temporary and lack capital investment incentives that affect every level of the economy, and every business large and small.
Much if not most of Obama’s tax cuts come with strings attached which, is the hallmark of government economic central planning that never works. As for his infrastructure spending, once the contracts are completed, the jobs end, just as they did in the past two and a half years of his presidency.
Another key part of Obama’s “new” economic policy was unveiled Monday when the White House announced it would raise taxes this year by $467 billion on corporations, investors, investment fund managers and people earning more than $200,000 a year, and end or limit a number of tax breaks, including charitable deductions.
So let’s get this straight. Our economy has virtually stopped growing. Job creation has stalled. The government says the jobless rate will likely remain at around 9% this year and next. Millions of Americans owe more on their mortgages than their homes are worth, and major corporations have announced tens of thousands of layoffs in the months to come. And the President’s answer is to raise taxes on the economy by nearly half a trillion dollars?
Obama’s plan is going nowhere in this Congress. It’s time to let a seasoned economic player step up to the plate, someone who can hit some big growth and jobs numbers to replace the zeros on the scoreboard.