President Barack Obama has presented his much-anticipated Jobs Act to Congress. It earmarks almost US$450 billion for putting people back to work. But critics say it is too little too late.
The United States has seen several years of sluggish economy and massive job loss. Unemployment remains over 9 per cent, or almost 30 million people. Starting next year, Congress may cut unemployment benefits, and the jobless will find themselves in an even more dire position.
President Obama in his address called for the Congress to extend benefits for the unemployed. He also suggested tax incentives for small businesses. Another measure he put forward was giving money to states and local governments – some $140 billion – so that they can keep teachers, firefighters and infrastructure workers employed, and largely to maintain consumption.
However, experts are saying the stimulus plan Obama is suggesting will not bring the US economy out of the woods, because in the best-case scenario it will only create 1.5 million jobs, with 11 million new jobs required just to get back to the pre-recession level.
Therefore, skepticism is prevailing in the Congress, with many law-makers being unhappy with Obama’s spending plans, while the president himself is unhappy with their unwillingness to compromise.
What is really surprising, however, is that, while Obama’s package of $140 billion in direct stimulus is being debated so fiercely, the bill giving nearly $1 trillion per year for war purposes gets passed easily and quietly. That leaves many Americans frustrated about their representatives.
Financial consultant Richard Eskow says Obama shows a lack of political strength, even though he claims to be tough.
“The housing crisis alone took US $6.7 trillion out of this economy. There are 25 million people unemployed or underemployed. So, yes, we need to be pretty aggressive,” he told RT. “As for the president, I’m glad he is talking about jobs – he should have done it before – but even when he says ‘I’m going to be bold and take a firm stand,’ he does seem to say to the other side: ‘Would you like my firm stand by throwing something that you like too – is that not too firm for you?’
“So I think we have reached the point when we have to say: ‘Look, this is the beginning, this is just a start if it passes. If it doesn’t pass then it’s clear that republicans want to sell this country out for their electoral chances next year,’” Richard Eskow concluded.
Republicans will not pass the bill, because to have a high unemployment rate going into the elections is advantageous for them, suggests David Lindorff, an investigative journalist from the US.
“They’re thinking ‘If there’s high unemployment, people will blame it on the president.’ And Obama in his turn is trying to convince the public that this issue of not dealing with the unemployment is the republicans’ fault. And it really is, in essence,” says Lindorff.
But even if Obama’s new initiative passes the Republicans’ grip, it is not likely to have a substantial impact, adds the journalist.
“$450 billion is scarce. It’s just a little over half of what their first stimulus package of $725 billion was. And even that [first package] was too small. Most economists were saying we needed a trillion dollars of stimulus to really have an impact back in 2009, but we didn’t get that. This is really a drop in a bucket now,” Lindorff states.
Meanwhile, the US can spend even more than a trillion dollars without any problem, claims the journalist. The country can borrow quick money, as people in the world are willing to buy US treasuries at the moment, and the problem of debt is more an ideological trick, he explains.