Out of Ammo on Jobs, Economy
Said Jay Carney, White House spokesman, on 4 August, 2011, in response to a reporter’s question about jobs, “Well, the White House doesn’t create jobs. The government together – White House, Congress – creates policies that allow for greater job creation. And that can be through tax cuts, for example, for working Americans; everyone who works pays a payroll tax. And the tax cut that this President pushed for, for one year, for this calendar year, he’s pushing for to be extended next year.”
Again, said Carney, in response to a reporter’s question about Obama’s upcoming bus tour, “Well, he will continue to make the case that we need to take the measures necessary as a country, working together with Congress, to – that will spur greater economic growth and create more jobs.” Responding to the same question, he continued, “So what we have to do is reduce our deficit in a balanced way that ensures that we do not actually harm our economic growth prospects or our job creation prospects.”
Economic Growth, Create Jobs?
With Carney’s statements in mind, let’s examine what economists say about economic growth and jobs creation. Some economists have said that the proven way to grow our economy is through tax cuts. Tax cuts that help small businesses create jobs include lower top marginal income tax rates and lower tax rates on capital gains and dividends. Small businesses that employ the most workers will be particularly hard-hit if taxes increase. There is never a good time to raise taxes, because higher taxes always slow job creation. But raising taxes now, as the economic recovery remains weak and job creation is non-existent, would be an economic disaster.
The US has a jobs creation and sustainment problem, and there does not seem to be much that President Barack Obama nor Federal Reserve Chairman Ben Bernanke can do about it. Regarding jobs and the economy, “Obama does not have much presidential persuasion left. He is running out of capital,” said James Thurber, of American University’s Center for Congressional and Presidential Studies. “It seems we’ve thrown everything at it. We’ve had QE1 and QE2, Stimulus 1 and Stimulus 2, and the unemployment rate is still 9.2 percent,” said John Makin, an economist at the American Enterprise Institute in Washington. “Maybe there are just not many options here at this point,” he said.
JPMorgan cut its first half 2012 growth forecast from 2.5 % to 2% due to fiscal drag. “Given that GDP growth has been 1.6 percent over the past four quarters when fiscal policy has been much less of a drag, this doesn’t bode well for next year,” JPMorgan’s Michael Feroli said. Federal Reserve chairman Ben Bernanke has few options at his disposal. The Fed is not expected to announce an extension of its quantitative easing, or QE, measures to stimulate economic activity.
President Obama promised more ideas to boost hiring and jobs creation soon, but the White House did not say what he had in mind or when he would lay out suggestions. Regarding tax cuts (the only one Obama has ever proposed), Obama proposes bringing jobs back to the economy through payroll tax cuts. He wants to repeal the Bush-era tax cuts on families making more than $250,000 annually, the very people who create most (non-government) jobs.
Regarding the Economy and Jobs, Where Are We?
After almost three years of economic failure and a huge debt, all we continue to get from this administration is “talk, talk, and more talk.” Still they try their old plays that have NOT worked, as we see from this article. When is this administration going to admit defeat, that their policies and ideas do not work? Who is going to sink first, this country or the Obama administration?
But that’s just my opinion.