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Obama’s New Job Boosting Ideas

This article was written by in Economy. 8 comments.


President Obama gave a “major speech” today (out of curiosity, can anyone tell what makes a speech major?) outlining several new proposals for boosting job creation and ensuring job stability. More than 90% of all economic indicators point to a recovery already in progress, but unemployment, even though it went down in a dramatic way for the first time last month, is still painfully high. And understandably, this is the single most important economic indicator for most people.

So, to help spur growth, the White House is hoping to implement the following ideas.

Small Business Tax Cuts

Small businesses (usually defined as those with less than 250 employees) would be encouraged to resume hiring with a new tax incentive for each new employee added to the roster.

Obama also proposed a temporary suspension of Capital Gains taxes for small business investment “along with an extension of write-offs to encourage small businesses to expand in the coming year”.

Because small businesses are still having trouble getting the loans they need, the White House is proposing to waive fees for, and increase the guarantees for, SBA-backed loans.

Infrastructure

The text of Obama’s speech was especially vague on this point, only saying that there were more than enough qualified infrastructure plans bid on for dollars from the original stimulus plan, and that they’d like to revisit some of them. These include improvements to “roads, bridges, water systems, Superfund sites, broadband networks, and clean energy projects”.

Reuters adds:

A senior administration official said around $50 billion of fresh money would be earmarked for spending on roads, bridges and other transportation infrastructure, and the money would be spent over the course of a year.

Energy Efficiency

Obama asked for Congress to “consider a new program to provide incentives for consumers who retrofit their homes to become more energy efficient, which we know creates jobs, saves money for families, and reduces the pollution that threatens our environment”, as well as expand certain proven Recovery Act programs in the same arena.

Seniors, Veterans, Public Service Jobs

From the Wall Street Journal:

The White House wants to provide additional $250 payments to senior and veterans and act on measures that could help local governments keep teachers and police officers employed.

Continued Unemployment Help

Also from the Wall Street Journal:

Mr. Obama said he also wants to extend fiscal stimulus programs that would provide unemployment insurance for out-of-work Americans and help laid-off workers keep their health insurance.

There are some numbers missing, and how will this be paid for?

Nobody knows that, yet. Obama did say that they were looking into making use of the “leftover” funds from the TARP program, which is being paid back more quickly than expected and has a cost estimate much lower than it was earlier this year. But the TARP program is apparently very well-written, and can only be used to rescue banks, or pay down the deficit. Administration officials are currently challenging this notion.

Full speech on CBSnews.com.

Updated December 26, 2010 and originally published December 8, 2009. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.

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About the author

Smithee formerly lived primarily on credit cards and the good will of his friends. He is a newbie to personal finance but quickly learning from his past mistakes. You can follow him on Twitter, where his user name is @SmitheeConsumer. View all articles by .

{ 8 comments… read them below or add one }

avatar MLR

I’m a huge fan of the infrastructure plans. Although, I think they aren’t channeling enough money into our infrastructure.

We have enough highways and bridges failing to allow for a bit more money! And IMO, that’s a pretty easy source of jobs, especially with the construction industry down.

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avatar Apex

Grade: D

1. Small Biz Tax Cuts and loans – C. While nice, they don’t strike me as something that is going to make biz hire if they didn’t want to hire. They either believe the economy will support their expansion or they aren’t going to do it, tax cuts and loans or not. This is probably a bone thrown at the GOP, but I am not convinced it actually helps lead out of recession. It probably helps a lot when things are going good. Any excuse to do something that reduces taxes when the company is making good money is sought after. But if the company is struggling, it isn’t going to take on debt or employees to save a little in taxes. And when things are going really well we probably don’t need to encourage biz to heat things up to the boiling point.

Infrastructure – A. Now this is a jobs program. Spend money doing something that creates an immediate job, provides long term value to our economy and is truly an investment in the future that pays benefits both now and then. If infrastructure wasn’t needed then it would be a waste but we clearly have lots of infrastructure that could be upgraded so this is a great idea for a jobs program.

Energy Efficiency – D. This is more about green than jobs and its more about a feel good talking point than actually stimulating much of anything. It’s similar to cash for clunkers and the housing credit. Analysts have estimated for every new home sold that got the home buyer credit that 4 other homes were sold and got the credit that would have been sold with or without the credit. So the effect is that the actual cost per extra house sold was 40K not 8K. That is the same situation here. People who are tight on money and don’t feel they need different appliances or windows do not go out and get upgraded because of a govt incentive to do so (a few do but most don’t). What actually happens is people who were already planning to do so, just get paid to do it and maybe make slightly more efficient choices as a result and some do it a little quicker than they intended. But on the net this doesn’t generate very much “new” activity.

Seniors, Veterans, Public Service Jobs – F. Giving seniors an extra $250 because they didn’t get a COLA increase this year has nothing to do with jobs and is pure pandering. Ditto veterans. Paying people to stay on govt service jobs that we don’t have the budget for is also not a jobs program. Lets just keep paying people whether we need them or not, whether we have the funds or not. In fact, lets hire all people who want a job and just have them dig holes and fill them up. A jobs program needs to generate a demand for jobs that are real, provide value, and contributes to the economy in a way that is sustainable. This is not a jobs program, this is welfare. (Which by the way, so was the 2 year Obama with-holding tax credit and the Bush tax rebates). It’s fine if you want to have welfare. Just say it, I want more welfare during these tough times. Don’t call it jobs. Thats insulting.

More Unemployment – F- This is the biggest joke of a jobs program ever. We have already extended people between state and federal extensions to be able to get unemployment for up to 2 years. Now we want to extend it further. How long does someone draw unemployment before they never want to work again. This is an anti-jobs program, not a jobs program. You don’t get jobs by paying people not to have jobs. I am not saying that these people can all get jobs if they just suck it up and go get one. They can’t, the economy sucks. It’s tough out there, I know that. I don’t have a lot of the answers, but 3 years of unemployment benefits has nothing to do with creating jobs.

So the infrastructure thing is great.

Maybe some money that created jobs doing medical research, and energy research.

How about some money creating jobs drilling for oil, building nuclear power plants, building coal plants, building 21st century transmission grids that could actually support some of this wind power that is a joke without them. The focus on just green jobs is a big detriment to creating real jobs that can help the economy right now and help our long term energy independence for decades. I am all for renewable energy, but to focus only on it is a great dis-service and simply not facing the honest reality of our current energy needs and the great jobs that could be created building out nuclear and coal plants that generate tons of energy.

I am sure there are other creative ideas they could come up with that actually create real jobs too. But other than the infrastructure portion of this which is great, the rest is just pretty packaging around the continued money drain.

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avatar Financial Samurai

I think so long as we raise taxes for EVERYBODY, not just those making over $200/250K, then it’s all good.

The “rich” get less of the benefits of these proposals, yet pay the most for them. Need to fight for equality!

It was actually a welcome signof equality to see the Unversity of California raise tuition on poor students by 32%. It’s ot fair, but with big spending, the government has to take money from everybody.

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avatar John DeFlumeri Jr

What thing will pit the 15 million unemployed back to work, that’s what i want to know!

John DeFlumeri Jr

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avatar Chris

“Obama did say that they were looking into making use of the “leftover” funds from the TARP program”

So here’s the problem with this plan…the TARP program was a line of credit. It wasn’t government spending. Heck, if anything the government was going to make money on the loan interest. The plan was that this money would eventually be paid back…net spending $0.

To take this money and act as though it was “unspent” is just ridiculous. It’s *NEW* spending disguised in the shell game. Problem is the funds weren’t spending before… The ideas might be good, but the implementation is disgusting.

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avatar JT

Apex,
Excellent commentary. I agree wholeheartedly. You stole the words out of my mouth!

The only thing I would add in addition is that people have very unrealistic expectations about when and how quickly unemployment will come down. Jobs will not be created overnight. It is almost certain that we will have a decade of structurally high unemployment. The reason is that all the jobs that were lost were only created as a result of runaway spending of the last thirty years. These jobs were built on debt and they will not return until the debt has been paid off or defaulted upon.

The real solution to this depression (yes, it is one) is to cut spending, not increase it. If we continue to pile on public debt then the entire country will face what millions of Americans are: default. There is absolutely no way that we can continue on the current path. And if you think the stimulus spending is bad, just wait until we have to pay all the unfunded pension obligations!

As I have been saying for years: The future is frugality; those who do not accept it now will be forced to accept it later.

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avatar Kira

I second JT and APEX. Heck – if Obama just announced that he was going to stop spending, the economy would have an immediate boost in consumer confidence!
I’ve seen the “infrastructure” spending effects on I-10. They put up a new green road sign 2 feet infront of the old one. Then, they went around and took down all of the old ones. Talk about government waste!
Again, you can artificially prop up demand by spending government money, but you can’t “create” it. If more than 3% of Obama’s administration had actually held a job in the private sector, they would know that.
10% of America is living off $200-$300 a week. They’re buying “generic brands” and using coupons. The best thing government can do is to let Americans keep more of their own money in the first place, not “give” it back to them. $.50 in your own pocket can go a lot farther than $.50 to the government for “programs.”

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avatar israel

I think we should hire more of the meter reader to reconvert the old street lights to solar panel and start builiding turbines,for more energy the states that have road workers or city workers that cut down ditches should start replacing the ditch lines with fruit,corns,fruit trees eveertime they cut the could be planting for more food america may have enough food but neighboring countrys may not.almost like taking a scorpion king movie of the pyramids and making it a reality or a mini paradise,With food growing every where to be picked grocery stores may not like it but at least its more food.wise man once said its better have more food then none at all.covering 45 percent of america ditches with food,same workers can pick it to be sold or just can be eaten,mini paridise of a vision amongst many visions,start traiding within america on jobs that succeed such more cpu jobs,metal industries,and food industries, focus of these 3 main things and electricity without pollution for future children,turning the country to complete paradise if america does it more other country will follow the idea.if not another country sees it then america becomes a follower.

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