America’s unemployed may have been encouraged by Monday’s Labor Day stimulus speech, but many experts believe the proposal by President Obama is just a drop in the bucket; an initiative that will fall far short of what our economy requires to get moving again.
According to the NY Times, the proposal “calls for a quick infusion of $50 billion in government spending that White House officials said could spur job growth as early as next year – if Congress approves.”
Naturally, one is left wondering how $50 billion in government spending is supposed to improve an economy that’s already been insufficiently inflated by $787 billion from February of 2009.
The White House has defended the stimulus package on at least one occasion, arguing that it created or saved 3 million jobs. Suppose that’s true. Now ask yourself what 6% of a securer of 3 million jobs is going to do for our economy. More to that point, David Sirota, political columnist, author & talk radio host out of Colorado, recently wrote in a blog on OpenLeft.com,
“If the job-creating weakness of the first stimulus bill was it’s willingness to devote roughly 40 percent of its funds to less-effective tax cuts and just 60 percent to employment-boosting spending, then a similar weakness will [be] even more amplified in new stimulus proposals that, by the administration’s initial figures, may end up devoting double to tax cuts what it devotes to infrastructure spending.”
At least one economist has indirectly argued that potential political ramifications of another near-trillion dollar stimulus package may be the reason we’re seeing such a small number in the infrastructure proposal. As Paul Krugman wrote in a recent column,
“The inadequacy of the administration’s initial economic plan has landed it – and the nation – in a political trap. More stimulus is desperately needed, but in the public’s eyes the failure of the initial program to deliver a convincing recovery has discredited government action to create jobs.”
Considering the fact that President Obama has compromised on so many issues since the start of his term, it’s easy for me to acknowledge the slim dollars in his latest initiative as yet another PR conciliation, despite the typical dispute by Republican leaders.
Now, I’m not one to subscribe to the idea that President Obama’s policies have exacerbated or even triggered a culture of uncertainty in the marketplace, but there is little doubt in my mind that $50 billion in infrastructure spending over a 6 year period is hardly enough, although, six years from now, it just may get credit for an improved economy it had very little impact on.