I didn't bother listening to the speech last night. I don't think I was anywhere that I could have even if I wanted to watch my blood pressure climb, and feel my pulse race. That said, it seems to be the buzz today, getting the most attention from outmoded news media (newspaper, tv, radio, etc), as well as current, relevant news publications (such as blogs, online reporting, etc).
While I am not an expert in things of economics, I do have a fair amount of common sense. So I'm going to comment on some of the things I've read.
Under Mr. Obama's plan, the unemployed would see several additional programs to help get them back to work.
When I hear/read that, I can't help but think 'More spending, more government agencies, more cost to the people who do have jobs, more cost to the people who can create jobs.' Government programs have a tendency of backfiring, or resulting in the opposite of their intent.
Meanwhile, employers would get a tax credit of up to $4,000 to hire people who have been out of work for more than six months, a move that would help level the playing field for the long-term jobless, said Rutgers economist Bill Rodgers.
The level playing field should not be forced based on an outside force. It should be level to the people in the playing field. Each person should succeed or fail by their own efforts. If this goes into effect, it will have the result of people who see companies hiring those who are unemployed for a longer period of time choosing to spend that time living off the government teet, and not being a productive member of society, opting rather to wait until they are part of the 'group' which gets special treatment.
As with the 2009 stimulus package, much of the proposed policy is directed toward the construction industry and the more than 1 million unemployed construction workers in America.
Again, special treatment for one group of people. Rather than focusing on the root problems, and how they impact the entire economy and nation, this package seems to be carefully directed at specific people. That sounds a LOT more like a campaign strategy, or a vote-winning strategy, than a 'fix the problem' strategy to me.
The plan would put $30 billion into renovations at schools and community colleges, $50 billion into the modernization of roads, airports, waterways and railroads, $15 billion into "Project Rebuild," a program that refurbishes vacant and foreclosed homes and $10 billion into financing for a national infrastructure bank that would use both public and private investment to finance infrastructure projects. Mr. Obama said these initiatives would create "hundreds of thousands" of jobs.
So, rather than taking steps to increase the availability of jobs overall, this will focus on specific, short-term jobs which may or may not last once the indicated projects are done.
Mr. Obama's plan would cut payroll taxes in half for up to the first $5 million in wages businesses pay and offer a $4,000 tax credit to companies that hire long-term unemployed. It would also extend the so-called "100% expensing," which allows firms to take an immediate 100% tax deduction on capital investments, an incentive that would otherwise expire at the end of the year.
Two out of three ain't bad, right? Anytime taxes are cut, especially taxes which can be seen directly relating to the number of employees, will always benefit job growth. So he's got that part right. But why stop at $5 million? Why not make it across the board? Additionally, the ability to write-off capital investments is extremely beneficial to the economy, as it removes some of the burden of that type of expenditure. The removal of that burden gives more willingness to the companies to spend the money, which provides work for other companies, and more jobs overall. But, again, see above regarding the tax credit for hiring long-term unemployed.
Still, because the proposed tax breaks are temporary, their effectiveness in creating hiring will be blunted, said Bill Rys, tax counsel at the National Federation of Independent Business, a small-business association.
So make those tax incentives permanent.
As of right now, I see nothing in what I've been able to find which gives me any confidence that this plan will have a positive, lasting impact. There are steps here which will help, but only if taken to their logical conclusion. The rest is just another stimulus package, and more 'spreading of the wealth.'
If the purpose of the money being given for these projects is job creation, how about a tax refund to everyone equally based on what they paid? Match that with permanent tax cuts, and you'll see job growth. Anything less than that is merely lip service for the purpose of garnering votes.