Wednesday, September 7, 2011

Three things Obama will propose on Thursday, and why they won't work

In case you haven't heard, President Obama will be addressing the nation tomorrow evening (before my beloved Packers kick off the NFL season, thankfully) about dealing with the down economy. It will be highly scrutinized due to the down economy and the Nobody knows exactly what he will propose, but he's dropped hints about the general theme's in recent weeks. There are three things that you can bet your piggy bank he will propose (in addition to saying all of this stuff:

He may propose other things as well (I've heard talks of targeted tax breaks and extending the "hire unemployed" initiative was allowed to expire in 2010) , but these three will almost certainly be a part of it.You can also bet your bank that these proposals will be framed very well, worded in a patriotic way that arouses little objection in theory. That Obama's own neck may be on the line at the polls means his oratorical brilliance (and he is brilliant, folks) will be out in full force. Unfortunately, neither of twp proposals will actually help the country, and both risk doing further harm.

1. Obama will propose more government spending on infrastructure like roads, bridges, and buildings. This Keynesian, New Deal-era tactic is designed to inject money into the economy and "create jobs" by hiring citizens to do work that needs to be done. But it will fail (just like it did in the New Deal, and just like it did in Obama's Stimulus in 2009) for at least 3 reasons. Firstly, it's not really injecting money into the economy, it's merely redistributing it. The government cannot give anything to anybody without first taking it from somebody else. The project would be simply be funded by other people's money, which restricts what those people can buy, invest in, risk, or lend and doesn't actually help bolster GDP or job creation. This is a highly partisan contention, and I could (and probably will) devote a whole post to me free market, FA Hayek-inspired macroeconomic beliefs at a later time. The second reason it's bad for the country, however, is not debatable: we are out of other people's money! Flat broke. Worse than flat broke, actually: 14 trillion dollars in debt, which is rapidly growing. Adding several hundred billion dollars in expenditures is not going to help that figure, is irresponsible, and foots an even heavier bill on young people like me. Thirdly, the jobs created by infrastructure don't last and don't reflect sustainable business development, while the jobs lost by the added taxes would have been sustainable because they reflect actual market trends. What happens when we're done building the bridge? Build another? Infrastructure projects expire as budgets are met, and then the workers are just as unemployed as before. Meanwhile, the business owner who was taxed to fund that project were prevented from using that money to hire somebody who could have had a sustainable job, responsive to consumer's actual desires. He/she was also prevented from lending that money to another potential entrepreneur, or investing it in a business venture employing even more people. Or worse, he/she was forced to fire somebody to keep their bottom line in the black. This philosophy embodies everything that's wrong with our government and economy right now. Politicians take more and more of our money to fund entitlements, wars, and pet projects that will help them get reelected, hurting the country in the process. Americans should be able to see through requests like this by now. The promise "If you'll just give us a little bit more of your money, I'll fix everything" gets kind of old after the 10th or 12th time. Starve the beast.

2. The president will ask that unemployment benefits be extended. They are currently available for 99 weeks after somebody loses their job (one year and 11 months, for the less math inclined). This number has already been extended once under Obama's tenure, and he'll doubtlessly push to have it extended again to "extend a helping hand to those who most need it" and "help them get back on their feet", or some other liberal BS. Truly, governments don't help people get back on their feet. People do. This will not improve unemployment, it will just make it easier for people to stay unemployed. Any analyst will tell you that extended unemployment benefits only delay the day when people have to get a job, and encourages people to hold out on lesser offers in an attempt to get something better or equal to what they had before. They won't get it. In an economy like this, people cannot expect to get a job as good as the one they lost. There are jobs available, they're just not the sort people envision themselves taking. Truth is, Americans are spoiled. There are billions of people in the world who would kill to have the job opportunities that even the poorest, most uneducated American has. If the president wants employment to increase, he should shorten unemployment benefits, lower the minimum wage (or abolish it? but I'm dreaming...) and tell people to buck up and get to work. If they choose not to, it should be no skin off taxpayers backs, especially at a time when taxpayers have no skin left on their backs. This would also decrease outsourcing. It's part of what Rick Perry did to enable job creation in Texas, and the President should (but won't) follow suit.

3. Thirdly, the President will call for "an end to partisan games in Washington", and try to "usher in a new era of bipartisanship". We've heard that one before, haven't we? Maybe the President should have thought of that before ObamaCare was crammed down our throats without a single Republican supporter using a variety of backdoor voter tactics. Suddenly, the congressional tables are turned, and he's Mr. Centrist. Obama's spent the whole summer complaining about the "manufactured crisis" engendered by Republicans (whose crime was refusing to raise the debt to fund his projects) solely for "political gain". Compromise is often floated as an "everybody wins" bargain, but in reality, everybody loses. Democrats and Republicans each lose because neither gets what the really want. Taxpayers lose because the size of government inevitably increases. And citizens lose because the compromise is likely to help some corporate lobbyist or special interest group in exchange for campaign support. In the 90's, this rhetoric might have worked better, because the populace was highly partisan. But today, the populace isn't highly partisan, they're highly disgusted and apathetic. In the 90's, voters blamed the opposite party for the countries woes; today, they're blaming both parties. A very unpopular Democratic president/congress has followed an even more unpopular Republican president/congress, and all of a sudden people are realizing that both parties are inept. They're realizing that no matter which side gets their way, or even if both sides get their way, that way is going to be wrong. Who they blame for this problem varies; liberals blame bipartisan big business, republicans blame bipartisan big government, and both blame corruption, but most realize there is a systematic flaw in the way our government is working. And if they don't trust one party, they definitely don't trust both parties at the same time.

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