The August jobs report shows the Obama jobs deficit at 7.5 million workers. The Obama jobs deficit is the difference between the current level of employment and the level he promised his stimulus policies would achieve at the end of 2010. The President boasted that his policies would create 3.5 million jobs, pushing total employment by December 2010 to 137.8 million. As of this report, he is 7.5 million jobs short. By his own metric, the President’s policies have failed.
According to today’s jobs report, the economy lost 54,000 jobs in August and the unemployment rate ticked up to 9.6 percent. In short, the economy is in trouble. His policies having failed as expected, Obama is now flailing about looking for yet another ineffectual and costly “stimulus” program, continuing the President’s penchant for gimmickry.
Policies such as a temporary payroll tax holiday (reported to be under consideration) are worse than doing nothing. First, they do next to nothing to increase hiring. Second, such gimmicks reinforce the confidence-sapping realization that the President either completely fails to comprehend the nature of the economy or he is willing to put ideology above prosperity.
Gimmicks rarely work. The “cash for clunkers” program accelerated car purchases for a while, pulling purchases from the future into the present. The future is now, however, and car sales remain weak.
Likewise, the housing tax credit temporarily pushed up housing purchases, but now the credit is gone and housing is worse off for the ride, because buyers and sellers are even less sure of correct price levels. This added uncertainty makes both buyers and sellers more hesitant to agree on a price, thus slowing housing sales even more than conditions otherwise warrant.
The Administration needs to abandon its dalliances with gimmickry and focus on economic fundamentals. One fundamental is this: The Administration needs to abandon its attachment to the Obama tax hikes—the expiration of the most economically important elements of the 2001 and 2003 tax provisions. Allowing any of these tax provisions to expire at the end of the year is irresponsible economic policy. It is also unnecessary as a matter of fiscal policy, as projected deficits are the result of excess spending, not a dearth of revenues. Cutting spending back to historical levels is all that is necessary to get budget deficits under control.
The damage the Obama tax hikes would do goes beyond the immediate effects of the tax hikes themselves. Such an indefensible economic policy under current conditions sends a strong signal to families and businesses alike: Either the President is completely lost at sea when it comes to economic policy or he is willing to put his big-government, high-tax ideology above the need for job creation. Either way, if the Obama tax hikes go through, the Obama jobs deficit is likely to remain for years to come.