Those who do not learn from history are doomed to repeat it. President Obama’s American Jobs Act must be considered in that context.
In November 2006, Democrats won control of Congress. Nancy Pelosi became House speaker-elect and Harry Reid became Senate majority leader-elect. America’s unemployment rate was down to 4.5% because six million new jobs were created in the three years after the Bush tax cuts went into effect. In FY 2006-2007, America’s budget deficit was $161 billion.
After two years of Democrat congressional policies, America’s unemployment rate ballooned to 6.8% and America suffered an unsustainable $1.4 trillion FY 2008-2009 deficit.
In November 2008, President Obama was elected. For two years, Democrats completely controlled America’s economic policy.
Between November 2006 and November 2010, more than six million American jobs were lost. America’s unemployment rate deteriorated from a very good 4.5% to 6.8% in November 2008 and to 9.8% in November 2010. America has had three consecutive trillion-dollar deficits and there’s no end to the deficit spending in sight.
Beginning in November 2006, fear and uncertainty replaced optimism and confidence among America’s job creators.
They have been hammered by Obamacare costs, a National Labor Relations Board that sues to block jobs created in right-to-work states, a “stimulus” bill that blew through $800 billion and yielded higher unemployment, a 10% income tax increase on job creators in 2013, impossible-to-meet environmental regulations that risk closing plants and destroying jobs, trillion-dollar deficits and increased risk of federal default, insolvency and bankruptcy, and 60+ tax code changes that will go into effect between 2011 and 2014.
President Obama and congressional Democrats replaced a pro-free-enterprise, job-friendly atmosphere that created over six million jobs between 2003 and 2006 with class-warfare, socialist “feel good” policies and seven million lost jobs between 2006 and 2010. Rather than reconsider their policies, they blame job creators and, of course, George W. Bush (never mind that they inherited a 4.5% unemployment rate and a growing economy in November 2006).
America’s private sector produces all private jobs and all tax revenue that funds all public sector jobs. Hence, the key to job creation is the private sector. If it thrives, America’s economy thrives. If it suffers, America suffers.
Two keys to job creation are reducing economic uncertainties so that job creators can better plan and reducing government-created cost burdens that prevent employers from hiring employees (cutting business taxes, tax compliance costs, burdensome regulations and the like).
Ultimately, Obama’s American Jobs Act (AJA) will kill more jobs than it creates because it does not reduce uncertainty, fails to permanently reduce business operation costs and focuses on “one and done” jobs that result in employees being fired the moment the AJA has blown through its $450 billion in borrowed funds. Examples of AJA job-killing attributes are:
1. The AJA imposes eight different tax increases on the already high-taxed oil production industry, thereby costing jobs in the domestic oil industry and driving up costs for gasoline and heating oil (which makes American businesses less competitive and costs more jobs).
2. Increasing America’s debt by another $450 billion, thereby promoting economic uncertainty resulting from increased risk of a federal government insolvency and bankruptcy.
3. Promoting costly, frivolous litigation by empowering disgruntled job applicants to sue job creators anytime an applicant believes (rightly or wrongly) an employer did not hire him because of his unemployed status.
4. Hurting churches, synagogues and other charitable institutions by increasing taxes on tithes and charitable contributions (and cutting revenues that create jobs in America’s charity sector).
5. Creating at least two more federal government bureaucracies with over $10 billion to spend and the power to interfere with free markets as they wish.
Over the long haul, these AJA costs and burdens kill jobs by driving employers out of business or encouraging them to relocate to foreign countries.
President Obama promised to take his economic message “to every corner of this country.” He’s done this and America has said “no.” Wall Street heard Obama’s economic message and the Dow dropped 300 points the next day. Voters in Nevada and New York City heard his economic message and Republican congressional candidates scored stunning victories (including a 54%-46% win in a district with a 3-1 Democrat registration advantage that had not elected a Republican in more than eight decades).
America’s economy has serious structural issues that presidential band-aids and make-up don’t fix and can’t hide. President Obama’s jobs bill simply is not up to the challenge.
President Obama’s American “Jobless” Act should be defeated because it is poorly thought-out, bad economic policy, will cost Americans jobs and has been resoundingly rejected by the voting public.
Congressman Mo Brooks represents Alabama’s Fifth Congressional District.