How to mask any failed policy: claim we would be worse off without it.
Despite the terrible job numbers, the president began his summer recovery tour boasting about the rampant success – cough! – of the stimulus bill. Building on this delusion, he claimed that unemployment could have been much worse, 10,000% or some arbitrary number, without the Recovery Act.
Obama needs to fire his economists. Christina Romer, his leading economic advisor, predicted unemployment wouldn’t go over 8% once the stimulus bill passed. Fail.
Out of this same brilliance arose another ingenious idea. Private sector jobs – obviously not stimulated by massive government spending – continue precipitating from the economy. Solution: spend $2 billion to create green 5,100 jobs.
Even for Obama, spending $400,000 per created job ought to be embarrassing; it demonstrates the failure of government to aid the private sector. If the government needs to spend 10 times the average American salary to create one job, something’s wrong.
But apparently such insanity is worth bragging about.
This new spending wasn’t hidden in some 2,000 page bill. With his head held high, Obama announced the plan himself. A few days later, he did it again, promising another program spending $795 million to create a meager 5,000 rural jobs ($195K per job).
The Census is over, and Obama needs to boost job numbers somehow. You’d think, being a fan a big government and Keynesian economics, he’d just go out and hire people to dig holes or, better yet, build infrastructure. With the $2,795,000,000 used for these two programs, he could hire 70,000 workers and pay them the average American salary.
Obama is paying a premium he sees as necessary to create real private sector jobs. He finally understands these jobs are more permanent and fuel a substantial recovery. Too bad his means work against his end.
More government spending means either more taxes or more debt. Taxes already cripple business investment, and as the debt grows, business’ faith in the economy falls resulting in less hiring. Plus, these new jobs aren’t founded from real demand, meaning people might not actually want the services Obama is investing in.
This might be a shock to our president, but government spending isn’t the only method of economic stimulation. It’s the weakest. Spending takes money out of the economy through taxes or the printing press; it takes money away from successful endeavors and puts it toward bureaucracy-managed projects.
If Obama keeps this up, he’ll fulfill another one of his advisor’s predictions. “I think we are going to be dealing with unemployment for a long, long time,” said White House Press Secretary Robert Gibbs last week.
Just like Hoover’s and FDR’s massive spending and high taxes kept us in the Great Depression, Obama’s dedication to Keynesian economics could keep us in this dour state for years to come.
Unless Obama finds freedom, our best hope lies with new leadership. With any luck, this fresh leadership will endorse the historically effective policy of targeted and permanent tax cuts. It worked for Presidents Harding, Coolidge, Kennedy, Reagan, and W. Bush; it can work again.
One of Obama’s heroes, President John F. Kennedy, adopted tax cuts creating 9 million new jobs and $150 billion in additional revenue. He believed the government’s “most useful role is not to rush into a program of excessive increases in public expenditures, but to expand the incentives and opportunities for private expenditures.” Talk about irony.
Tax cuts let businesses and individuals keep more of what they earn, funding more investment. For business, this means more capital to hire workers and buy equipment. For individuals, they can spend, invest, or save the money.
Modern Democrats claim tax cuts only cause the rich to save their money. Even if some people save their money from tax cuts, it flows into the economy by putting solid reserves into banks, allowing for more liquidity for loans and further capital investment. There’s no downside: more freedom, more jobs, more revenue.
Real jobs come from real business owners, not the government. Washington needs to empower the people, not themselves. Obama ought to stop bragging about wasting money and start proposing policies that work.
Ron Meyer hosts We the People Internet Radio Show and writes a weekly column for Human Events. He is a student at Principia College and a former National Journalism Center intern who has also written political opinion for AOL News and the Santa Barbara News-Press.