As a dog returneth to his vomit, so a fool returneth to his folly.
– Proverbs 26 (HT: Kingjbible.com)
It’s fortunate that all our Elected Leader promised us was a Job’s Plan. Because the plan he presented last night looks like a cribbed version of Christine Roemer’s failed effort from 2009. The President’s proposed American Jobs Act features the same boondoggles, the same EBT Cards, the same targeted tax relief and undoubtedly; the same result.
Like the rest of Barack Obama’s Presidency, this bill will be smaller than the failure bomb detonated in 2009. He intends to only add $447Bn worth of “paid for” spending to the deficit this time. The last time out, the price tag was $787Bn. So, outside of a $342Bn concession to the results of the 2010 Midterm Election, President Obama has learned positively nothing from the last 2.5 years.
The Boondoggles in the prior stimulus included Infrastructure Investment, renewable energy investment, $100Bn in education spending, and numerous other proposals best forgotten. The new plan includes the following boondoggles: transportation infrastructure, school repair and modernization, and more house rehabilitation. It’s the same plan as the prior stimulus. It will give us the same result.
The original American Recovery and Reinvestment Act of 2009 included approximately $82Bn worth of spending on social welfare programs. This was targeted to favor the recently unemployed. The new American Jobs Act extends the welfare expansion for yet another year. The motives here are decent and noble, but these continued extensions have turned the necessary societal safety net into a hammock for the ne’er-do-wells. The the real-world results are a disincentive for low-skilled individuals to seek gainful employment. Decent intentions do not insure a successful policy outcome and this also will fail.
The 2009 American Recovery and Reinvestment Act attempted to put spending money in the pockets of consumers by reducing the rate of payroll tax collections. It also included targeted tax breaks for education, home purchases and some remodeling and incentives to buy new cars. This was supposed to goose aggregate demand and convince people drowning in personal debt to buy more big-ticket items on credit. The American Jobs Act will extend these tax breaks.
Thus, the American Jobs Act is remarkably similar to the failed 2009 American Reinvestment and Recovery Act. All our President seems to have in his toolkit is a hammer. He will use it to pound away at the current Phillips’ Head Screw and wonder why he can’t drive it through the board with significant success. It’s the sequel to a Hollywood Movie that bombed in its original run. We could call it Stimulus – Smaller, Shorter and Regrettably Un-Cut!
The legislation will pass, and then it will fail. It will work politically and then it will fail to improve the American economy. Let’s all hope it is the final, misguided act of Barack Obama’s one-term presidency.