Say Anything Blog

The all the applause Obama has gotten for appointing a “moderate” economic team (I’m still convinced that the moderates in Obama’s administration are simply stage dressing meant to distract from his “Jimmy Carter’s second term” policies), the guy just doesn’t get what’s wrong with this economy and how we can fix it.

WASHINGTON (Reuters) – President-elect Barack Obama said on Saturday his plan to create at least 2.5 million new jobs included the largest infrastructure investment since the 1950s and a huge effort to reduce U.S. government energy use.

The United States will also make a big push to expand access to high-speed Internet and modernize school buildings across the country, he said.

“We need action—and action now,” Obama said in the Democratic Party’s weekly radio address, one day after government data showed U.S. employers had axed 533,000 jobs in November, the most in 34 years.

“First, we will launch a massive effort to make public buildings more energy-efficient. Our government now pays the highest energy bill in the world,” Obama says.  I’m actually all for that.  But his promise to create 2.5 million jobs through the massive expansion of government spending is foolhardy.

Government spending doesn’t create jobs because, by necessity, all the money government spends is first taken from we citizens.  The government spending that money means we cannot spend it.  At best the government can only create the same number of jobs as would have been created had that money stayed in the pockets of taxpayers.  And that’s unlikely because a) the government takes a chunk of the money it collects for administration and b) the government never spends as efficiently as individual citizens do in general.

Unless Obama is planning on a ton of deficit spending that will be fueled not by tax dollars but by money borrowed from other sources, his spending initiatives aren’t going to accomplish much of anything.

What I find amazing is that Obama actually talks about employers who are laying off workers, and then says he’s going to fix that problem by…building more roads?  And refurbishing schools?  Roads are great, and I actually think we do need to look at investing some tax dollars in our infrastructure, but that’s not going to fix unemployment.  That’s not going to fix the reason why these employers are letting employees go.

If Obama wanted to fix that problem he’d be talking about putting more money in the pockets of these business owners, and the people that patronize the businesses they own, through tax cuts.  At a time when the people who pay the most taxes in this country (business owners) are feeling the pinch and cutting costs we shouldn’t be looking to burden them with more taxes (or even just keeping the existing tax rates high).  We should be looking to ease those burdens.

Unless, again, Obama is planning deficit spending.  But that’s problematic for a whole raft of other reasons.