Morning Bell: Weak Economy Disappoints Again
Mike Brownfield /
Every day, America waits for a brighter future to arrive — the promise of change that President Barack Obama made in 2009 when he set a benchmark for his success on the economy, remarking, “If I don’t have this done in three years, then there’s going to be a one-term proposition.” More than three years later, very little has changed. As today’s jobs report shows, the U.S. economy only added 115,000 jobs in April — well below expectations and far, far below what is necessary to drive the economy back to full employment.
Lackluster employment results dominate today’s report. It’s been three years under the Obama policies, and 12.5 million Americans remain out of work. No demographic group except black workers saw an improvement in their unemployment rate, and 13 percent of black workers remain unemployed. What’s more, the labor force participation fell to the lowest level since 1981 at 63.6 percent. Americans are fleeing this economy when at this stage workers should be returning to the labor force.
This shouldn’t surprise anyone. While little has changed with the economy, little has changed in President Obama’s failed policies. Rampant federal spending continues unchecked; the debt continues to grow; a monstrous tax hike is set to hit Americans on January 1, 2013, infecting the economy with renewed and debilitating uncertainty, and the country’s energy policy remains in shambles.
The latest example of the president’s recycling of his Administration’s failed ideas came in a speech this week to the Building and Construction Trades Department Conference. Obama used the opportunity to pander to his Big Labor allies and called for more federal spending on infrastructure as a panacea for job creation, claiming that his proposals would put “hundreds of thousands of construction workers back to work repairing our roads, our bridges, schools, transit systems.”
But here’s something to remember: President Obama’s near-trillion-dollar stimulus — the American Recovery and Reinvestment Act of 2009 — was intended to inject demand into the economy and spur the creation of new jobs. That’s the very same theory the president is still advocating today. Apparently, it’s all he knows. It didn’t work then, it’s not going to work now.
Heritage’s Patrick Knudsen explains that dumping taxpayer money into projects like these “simply moves resources from one place to another — it may employ unionized construction workers, but only by reducing jobs in other sectors.” But it still costs money — money the government gets by borrowing and thereby reducing private sector spending — so of course there’s no net job growth or economic boost for their “investment.”
The president’s call for more spending to boost a stagnant economy also exacerbates an already-serious problem: the national debt. As Heritage’s 2012 Edition of the Federal Budget in Pictures shows, federal spending per household is skyrocketing and is projected to rise to $34,602 per household by 2022. And because all that spending exceeds revenue by more than $1 trillion, America’s debt is continuing to grow, hitting 101 percent of GDP by 2021. Ultimately, this threatens to boost the country’s already-high tax burden, further discouraging investment and job creation.
That tax burden is set to get even worse in 2013 with the advent of Taxmageddon — a combined 34 percent increase in taxes resulting from the expiration of existing tax policies and the imposition of new ones. Ironically enough, President Obama once said that raising taxes in a recession is a bad idea. And though America is not in a recession today, it still suffers high unemployment, and raising taxes will still have the same negative effect that the president claimed he wanted to avoid — higher tax burdens on workers and job creators hamper economic growth. Yet the president is sitting back in the face of the 2013 tax nightmare, apparently content to slam the economy for the sake of big government, while also calling for higher taxes on wealthy Americans and job creators ostensibly as a way to make society more “fair.” But really he’s just trying to distract the nation from his failed policies.
Throw in an energy policy that seeks to punish oil and natural gas companies, prevent the exploration of domestic resources, waste money on fruitless “green jobs” programs, and impose new regulations that make energy more expensive, and you have a recipe for the economic stagnation that America is seeing today.
The American people are not and should not be satisfied with 8 percent unemployment, an economy that’s inching along, and a spending-induced fiscal crisis that remains unresolved. The U.S. economy has great potential that’s just waiting to be unleashed. With the right policies — like those proposed in Heritage’s Saving the American Dream plan — the United States can solve the national debt crisis, reduce government spending, and get the economy back on track.
Don’t Miss This: Yesterday, President Obama’s team introduced the “Life of Julia,” a portrayal of a liberal vision of life for one woman. Here’s our version, showing how conservative policies can empower Julia and all Americans without government interference at every stage of life.
- As the White House continues to take fire for its mishandling of blind Chinese activist Chen Guangcheng’s request for asylum in the United States, the Chinese government says that Chen could apply to study abroad “like other Chinese citizens.” Yesterday, Chen called Congress and requested free passage to America.
- The Environmental Protection Agency is turning toxic. The Washington Post‘s editorial board writes today that the EPA is “earning a reputation for abuse” and that it is sending the signal that “its enforcement is capricious or unduly severe.”
- There’s a lot to “like” if you’re a Facebook executive these days. The company set the price range for its initial public offering at $28 to $35 a share, putting its value at as much as $96 billion — a record debut for a U.S. company.
- Could Attorney General Eric Holder be held in contempt of Congress? Rep. Darrell Issa (R-CA) is circulating a draft copy of a resolution doing just that, stemming from Holder’s failure to respond to subpoenas relating to the Fast and Furious gun-running scandal.
- Lunchtime Web Chat: Join us today from 12 to 1 pm ET for a lunchtime Web chat with Heritage’s Alison Fraser. She will take your questions about our country’s debt and spending crisis. Click here to join in.