An Economist's Perspective on Obama's Job's Plan

Although in the eyes of many Americans President Barack Obama’s chance of re-election is fading quickly, the fact of the matter is that we're in the midst of a jobs crisis and economic recession that needs to be dealt with. President Obama is fully aware of all of these facts and announced to the public his jobs plan on September 8, 2011. His “American Jobs Act” consists of $447 billion worth of spending and tax cuts that will hopefully give the economy the jump-start that it needs to regain it’s strength. There are many parts to this extensive plan, but some of the key parts are modeled after republican-created programs. Some of the important parts of President Obama’s jobs plan are to extend and increase the 2% pay-roll tax cut to 3.1%, extend unemployment benefits past December, and spend $140 billion on public works and state aid. Of that $140 billion, a good part of it will go to helping rebuild schools, paying teachers, firefighters, & police, and investing in public work projects like highways and public transportation. More specific information on the cost and division of the major provisions can be found in the chart below.

President Obama insists that his plan will not add to the constantly growing government budget deficit. Congress’ super committee, formed after the debt ceiling crisis, is responsible for finding $1.5 trillion in “deficit reductions” to help finance President Obama’s aggressive plan. Although that’s easy to say in a speech, the true test of the plan will be the bipartisan agreement. According to the author, this is probably President Obama’s last chance for appeasing the republicans while enacting an aggressive plan to combat our nation’s problems.

Although this article outlines Obama's economic plan, the author stresses the importance of a bipartisan effort in the issue of unemployment. The president made a conscious effort to appease the harsh and dismissive Republicans. President Obama is employing the extremely useful tactic of "Positioning" by cooperating and even modeling many of his policies after similar ones Republicans praise. Mr President knows that the Republicans are being stubborn here and is willing to compromise with them. To some extent he is also using the lesson of "Always Concede on Principal" by telling his critics what they want to hear. For those who are desperately searching for employment, obtaining more jobs is the main goal, and it's insignificant how that goal is achieved. Hopefully this proposed plan will help give people incentives and opportunities to return to work. According to the business model, we need workers to produce more in order for wages and spending to increase. The unemployment crisis is affecting America’s production and status as a nation. Without the money going into the households, there is no money going in the product market, which means there is a lack in businesses revenue. The cycle goes on and on and without any money flowing into the pockets of the people. Hopefully this plan will employ more people, which will lead to increased production and hopefully hoist the US out of this economic recession.