Have you and your significant other ever splurged on a big night out and then discovered the following day that you need to replace your roof or a major appliance? If so, you might have some idea how President Obama must feel at the moment. An article titled Job-Creation Panel Leary of Spending in this morning's WSJ reports that "A top White House advisory committee Monday recommended ways to expand jobs in exports, energy-efficient buildings and infrastructure, but in an apparent nod to the U.S.'s growing debt, stopped short of suggesting such policies be promoted by large federal spending." After bailing out our major banks, buying-out GM and further deficit spending on programs like cash-for-clunkers the Executive Branch is now wary of spending on programs to incent corporations to create jobs and alleviate the devastating impact of unemployment on 10% of the U.S. workforce.
The Journal states that "the White House and Congress have been weighing a range of short-term tax ideas to spur job growth, such as expanded refunds for big companies that suffered losses; extension of a first-time home-buyer tax credit; and a new tax credit for hiring. But administration officials and congressional Democrats have been struggling with how to fashion a big jobs package that doesn't add considerably to the worrisome and unpopular budget deficit." We can only lament that this apparently new found deficit spending/budget consciousness didn't hit home earlier. Mr Obama is quoted saying "We are not going to be able, through government spending, [to] replace business investment, ... The most important thing we can do is create an environment in which business investment is triggered and they are leading us on this path of economic growth."
Decreasing the national debt must clearly be a top -- if not the top -- priority of the federal government but the lack of consistency here is troubling indeed. Consumer spending is the backbone of the US economy and putting people back to work, providing the confidence to spend as they see fit to say nothing of re-establishing the lost tax base vs. shelling out unemployment benefits has to be a major component of the solution. Regardless of past mistakes, shying away from providing corporate tax incentives to spur hiring at this stage of the federal spend game is incomprehensible.
Full Disclosure: My fiancé, who has worked in procurement and inventory management for 37 years with a stellar record and references, has been unemployed for the past 5 months while actively engaged searching for future employment without so much as a single interview.