I didn’t get to see President Obama’s Jobs Speech last night on TV, but rather I got to hear the President’s Jobs Speech on NPR. Mostly because the jobs speech came on at 6pm here in Houston, and I was sitting in traffic on my commute home.
I think President Obama did an incredible job of highlighting his ideas, showing that there should be support for his plan because others have supported the separate issues in the past. President Obama also was very inclusive and reconciliatory while also authoritative as far as what needs to happen to create jobs here in America. President Obama pointed out that there are 14 months left until the election, but the Congress can’t just sit there for fourteen months while the economy continues to falter with false starts and stops all while many Americans are unemployed.
I’m sure many out there will say ‘NO’ to everything President Obama has suggested to reinvigorate the economy and create jobs. However, I think everything that was suggested sounds reasonable. I also think taxes will need to go up in the long run. I don’t see any way around that. A good way to use those increased revenues is to reinvest back in this country. Trains, bridges, airports, teachers, colleges. All of the things that will increase American efficiency while investing in a smarter and innovative future labor force.
Additionally, just from an economic point of view (of which I got my undergraduate in, along with mathematics) this stimulus bill will be more effective than those in the past. Tax cuts do stimulate the economy and are a very quick way to do so. However, Tax cuts have a very low money multiplier. That means, the taxes given back don’t actually make it back into the economy. Normally they go into savings accounts or pay off debt. Great for the long run health of Americans, but it doesn’t get people spending again.
Whereas, direct investment in public works projects have an extremely high money multiplier. Meaning they create jobs immediately, and those jobs than create other jobs, because the original construction workers are buying tools, they’re eating out at night, they’re using up raw materials which then need to be mined or refined in factories, etc. Public works projects in their nature create jobs, it just takes a while for them to do so.
The tax cuts in the past have decreased the amount of personal debt Americans carry, whole increasing the amount of public debt we carry (i.e. the national debt). Instead public works projects will increase the available jobs out there. Creating tax revenues from those wages and all the added ancillary jobs created. In order to get out of these deficit and debt issues, we need more tax revenues. This is a great way to do that, without even touching the tax rate.
As you can tell I’m excited for President Obama and for his Jobs plan. Leave me comments on what you thought of President Obama’s Jobs Speech and please watch the video it’s entirety above!