President Obama proposed a new American Jobs Act to Congress that will cost $467 billion to try to lower the unemployment rate. However, this spend and create jobs approach is outdated.
The Democratic Congress passed the American Recovery and Reinvestment Act in 2009 that also tried to generate employment. In fact, President Obama went even further and promised Congress that the bill would cap the unemployment rate at 8 percent.
Facts speak louder than speeches. Obama passed the bill and the unemployment rate is at a stagnant 9.2 percent. Even Democratic Congressman Barney Frank, an Obama supporter, criticized the President’s 8 percent pledge. “[Obama] predicted or his aides predicted at the time that if it passed, unemployment would get under 8 percent … That was a dumb thing to do,” as reported by “The Hill” blog.
The 2009 Recovery Act was a $787 billion project, and this 2011 bill is just about half of that amount. At least the President is trying to implement some fiscal sanity by spending less, right? The President just doesn’t get it. These employment projects are inefficient.
Increasing taxes is the wrong way to create jobs. The American Jobs Act increases taxes on the rich by $400 billion. The rich are the employers of America. Call them whatever you want but they are the ones that invest in the economy and expand their businesses and employ more. This country is still in an economic crisis and taxing more will not help.
In order to create jobs, the President must implement confidence in the markets. This wouldn’t cost $500 billion or $787 billion but zero dollars. If the President would cut spending and reform entitlements and taxes then the markets would see more investments. Today the markets fluctuate back and forth because investors don’t know what the country will look like tomorrow.
Now this is not very simple. There will be many discussions on how and what to cut from the budget. That’s understandable. Same goes for reforming taxes. Liberals want to raise taxes on the rich and conservatives want to keep taxes low on the rich. There is common ground to be had. Tax loopholes could be eliminated right away and that would generate revenue. However, this is not a revenue problem but a deficit in confidence.
Instead of proposing a liberal bill, Obama could propose a bill that would get Republican support. If he is serious in getting things done, he must know that Republicans will never vote to raise taxes on the rich. This President must learn. The country is not as united as it was back in 2008 when he savaged Senator John McCain in the elections. Congress is Republican and the Senate has a good chance of turning Republican. Hopefully this jobs bill is not a campaign stunt but a genuine effort to turn this country around.