Unemployment: The Skinny about Obama’s Stimulus
Barack Obama has projected that his future economic stimulus plan will create nearly 3.7 million jobs by the end of 2010, mainly in construction, leisure services and manufacturing. His plan will lower the unemployment rate by 1.8%. Last month, Bureau of Labor Statistics numbers lifted the national unemployment rate to 7.2 %. During recent discussions of the employment aspects of his stimulus plan, there is little mention of his dream regarding green jobs and developing technologies. What’s more, the stimulus plan won’t stop the continued erosion of unemployment even though the Federal Government projects a rosy jobless projection at the end of 2009 as 8%. Have you heard anyone else as optimistic about the U.S. unemployment rate in light of the obstacles that the nation currently faces? Most intelligent Americans and experts alike see plenty of hard times ahead.
The more myopic among us see the currently publicized $775 billion idealized plan as bringing back unemployment to current levels by the end of 2010. This assumption is based on almost no more job losses for 2009 or 2010, yet another idealized fantasy considering the current reality and the expectation of continued job and economic losses throughout this year. Perhaps Obama realizes that the nation will see a dramatic spike in job losses this year as well, but expects the economy to be sufficiently healed by the time the results of his plan are expected to kick in. He isn’t saying this however and certainly isn’t accounting for the economic losses along the way.
The origin of the conclusions for Obama’s job and economic stimulus plan remains uncertain since Obama himself has acknowledged that there is no finished proposal. Obama has maintained that he will work closely with the Congress to hammer out the details for the principles of his stimulus plan, which, to this writer, sounds like more political boilerplate of the past. Obama is entertaining ideas outside of his own team. “If members of Congress have good ideas, if they can identify a project for me that will create jobs in an efficient way, that does not hamper our ability to, over the long term, get control of our deficit, that is good for the economy, then I’m going accept it.” Without question, President Obama’s stimulus will be the largest in United States history.
Obama also promises to invest heavily in infrastructure, education, health and energy while sending needed financial relief to states, increasing unemployment insurance and food stamps funding. He will also cut middle-class taxes for Americans. Considering the size of the last stimulus and Obama’s ambition, $775 billion seems like a modest estimate, especially considering the Congress will add obligatory projects and pork barrel spending. The reality is that some of the promised measures may be threatened because of financial pressures. As usual, the Federal Government has a faulty math problem coupled with a dose of wishful thinking, even when examined with the full reality of the economic contraction of what is expected this year.
Since unemployment rates in the United States will admittedly continue to rise, how will the figures specified in Obama’s projected plan actually work? Clearly, even the size of Obama’s $775 billion projected stimulus is not enough to do the job needed, even though that sum is a huge government expense for 3.7 million jobs if that was all the stimulus would accomplish. Clearly, Barack Obama is painting a very optimistic picture despite his projections of continued severe economic contraction. Fortunately, Obama and the Congress don’t need to worry a budget deficit or a national deficit. That issue isn’t on their radar, a back burner ideal at best. As Barney Frank recently stated, accountability isn’t an issue. Millions of Americans love Obama and want to trust him. Unhappily, a lack of credibility is not what our new President needs. The appearance of wearing rose colored glasses where money is concerned isn’t the kind of credibility that Barack Obama should seek. ~ E. Manning