Since I have sent a letter to the editor about the President’s recent jobs speech, and discussed it on Facebook, I thought it would be good to write more about it.
The text of the President’s jobs speech can be found here. The condensed version, which sums up the speech for those of us who are tired of the idea that we need just one more speech from The One to make everything better, is here:
Here are some thoughts about the speech, in no particular order:
1. The repetition of the phrase “pass this jobs bill” is grating. It sounds like the rotten kid in Wal-Mart who is demanding that his Mama buy him a candy bar, and is using his full rhetorical skills to get it. Unfortunately, that kid is 4 years old and has not developed any rhetorical skills yet.
2. That rhetorical repetition is even more grating, when you realize that President Obama had not even submitted a jobs bill at the time he made the speech. Let’s say that he had a compliant Congress who answered “How high” whenever he said “Jump.” They simply could not “pass this jobs bill,” because it doesn’t exist yet. He even said “Pass this jobs bill, and tomorrow…” when the written bill is not even going to be submitted until next week.
The Republicans were correct not to have an official response to this speech, because the speech left them nothing concrete to respond to.
3. The idea that “there is nothing controversial in this bill” is just silly. Obama’s rhetorical trick here is to say that since some Republicans and some Democrats have supported an idea in the past, that it is therefore not controversial. But that is just silly. We got rid of a lot of Republicans who had some of these ideas in 2006 and 2008, and in 2010 we purged a large number of Democrats, after eliminating a bunch of incumbent Republicans in the primaries. And some of the ideas were proposed at a time when our government was not completely broke.
4. The president proposed a $4,000 tax credit for hiring a worker who has been out of work for more than six months. (As opposed to just hiring the best qualified person for the position.) As a manager who makes hiring decisions, this strikes me as a particularly stupid idea. When I hire someone, I should be choosing the best person for the job, not the person who will give me a small, temporary tax break. If I let my decision be swayed by a relatively small benefit, I will probably regret it in the long term. The kind of thinking displayed by the president is the thinking of a person who hasn’t made real hiring decisions that involve financial consequences.
5. He also proposed a temporary 50% cut in the (Social Security) payroll tax. This cut would affect both employers and employees, and it would be significant. Part of me likes this, in the same way that Ron Paul probably likes this idea. However, if Obama wee smart, he would not be proposing this cut.
Social Security is based on the idea that payroll taxes come in, and then they go out to retirees. We were allegedly running a surplus that went into a Social Security trust find (which only exists on paper, but people in government like to pretend), and now that the Baby Boomers are retiring, we are drawing from this trust fund in addition to payroll taxes. If present trends continue, the trust fund will run out around 2042, and everyone’s benefits will be cut.
If we reduce the payroll tax now, then Social Security receipts will be cut in half for a while, the Trust Fund will be further reduced, and date of Social Security’s insolvency will move forward. If this goes through, you had better take every penny of this tax cut and invest it in your future (paying your debts down would be a good idea), because the government won’t be taking care of you.
6. All this stuff about building bridges, repairing schools, etc. Didn’t we just do that with the $787 stimulus? Why should we need to do that again? Did we botch the first stimulus or something?
7. He says this will all be paid for, but that is highly unlikely. First of all, his proposals are estimated to cost $447 billion. ( The number will change when it a real bill is submitted.) According to Keynesian theory, a stimulus should be “timely, targeted, and temporary.” That means that the $447 billion should be spent over 1 or2 years, which means that the deficits in the next two years will be increased by $447 billion, or about 20%.
To pay for this, he is telling the deficit commission to find more savings. This commission, consisting of 6 Republicans and 6 Democrats, was charged with finding $1.5 trillion in savings over the next decade. If the American Jobs Act is passed, they will have to find $2 trillion in savings. Except that since a dollar now is worth more than a dollar in the future, they really need to find about $2.5 billion in savings over the next decade. Their job just got 60% harder, and getting Democrats and Republicans to agree to anything is hard enough. Instead of proposing anything, he just waved off the problem, and is trying make others deal with it.
8. The fact that he is asking them to change their mission a mere month after he agreed to their current mission, shows that he has contempt for congress, and regards them as an obstacle to doing whatever he wants to do. Either that or he is just plain desperate.