Let me start by saying that I am not Barack Obama’s biggest fan. I saw him get elected by a landslide to the senate in my home state of Illinois, only to see him do nothing for two years except work on his campaign for the presidency. Once elected to the presidency, I have seen him muddle through 3 years of “Same stuff, different guy” politics. He has grand ideas–he rarely shares the details with anyone, but he apparently has them. He has faced some crises, much like his predecessor, and much like his predecessor, he has handled some well and some not-so-well. What he is very good at is campaigning, which is basically what we’re seeing now. This next year will likely be the most exciting and productive of Obama’s presidency, because he’s in his element.
Make no mistake, the job creation address was a campaign speech. It was designed to back his Republican contenders into a corner of either being forced to admit that Obama has a good idea or looking like they’re the grinches who want to take our jobs away. Checkmate. It might even work, mainly because the field of Republican contenders appear to be too inept to get out of their own way, much less leap over a roadblock the president throws at them.
So let’s look at the plan itself, or at least the bare bones idea that Obama was willing to share at this time. First, there’s the tax cuts for small business. That’s a good idea. It’s a Republican principle akin to supply side economics that doesn’t seem to work on the grand scale but might just have some effect in the small business world–put money in the pockets of the business owners and they may hire more people. Next, he recommends making current payroll tax cuts permanent and extending further cuts to taxes for “Regular people.” I read that the average family could expect to save about $1,500 in taxes with his plan. I have an average family and we could use $1,500. He’s got my vote on that one. The theory is that giving average people more money will make them buy more useless junk so that the companies who make useless junk will hire more people. Okay, fine. He also wants to extend unemployment benefits. I’m not happy about that, but it’s necessary, maybe with greater oversight to prevent abuse. Finally, Obama has proposed an increase in spending on infrastructure. The theory is there, but I fear the reality is that money spent on “Infrastructure” ends up lining the pockets of zoning commissioners and union chiefs and in the end the same amount of people are hired and the same amount of work is done. If he adds a layer of accountability, this would be more encouraging.
How does President Obama hope to pay for all this? Republicans, cover your ears. Tax the rich. Keep ‘em covered. I agree with him. Rich individuals and corporations are sitting on far too much money now and that’s part of the reason the economy is stagnant. If they won’t spend it or invest it, take it away and give it to someone who will. Obama has also talked about saving money bymaking changes to entitlements (social security and medicare), but that’s really just rhetoric–it’s political suicide for any politician to actually vote for a measure that has any effect on social security or medicare.
So overall, I like the proposal, even though I know Obama’s motives are not altruistic. However, there are a few things missing from it that I would like to see. First, there needs to be an overhaul of the tax code to close ridiculous loopholes. Second, there needs to be some further attempt made to address the housing crisis (the bleeding wound that is preventing our economic recovery). Maybe to settle the new lawsuit with the financial firms, the government could make them do a no-cost refinance of every existing loan under 1 million dollars at the current ridiculously low interest rates, and maybe use TARP funds to write off the differences on loans where the balance is higher than the worth of the house (you know, like the original plan was supposed to be?). That would stop some foreclosures and pump some money back into the economy, I guarantee. Finally, subsidizing a permanent waiver of local sales taxes for goods manufactured in America would be a great way to level the playing field and get American business rolling again, but it’s hard to say if the cost would outweigh the benefit. I think Obama’s plan, with these tweaks, might just lead this nation through this mess (and probably get him re-elected, which is what this is really all about for him).