Diary

New Plan...Same As the Old Plan

In 2009, President Obama proposed a stimulus program that was supposed to keep unemployment below 8% via massive government spending and the creation of three to four million jobs. Instead, the $830 billion spending boondoggle known as the “American Recovery and Reinvestment Plan” created almost no jobs as unemployment shot to 10% and the total measure of under-employed shot over 18%.

It appears that the president’s speech tonight will involve proposing more of the same measures which have already failed, just on a smaller scale. The plan will include spending on infrastructure, aid to state and municipal governments in the form of enhanced unemployment benefits, continuing the currently discounted payroll taxes that have been in place since 2009 (and allowing them to rise right after the 2012 election), and another version of a mortgage refinance program similar to the Making Homes Affordable plan included in the last stimulus.

The plan may also include funding for job-training modeled on the “Georgia Works!” program, where individuals receiving unemployment can receive job training at business without cost to the employer, while also receiving a small stipend. However, in seven years of operation, only 4,000 people have been able to find full-time work. There has been criticism leveled from both job-seekers (citing not being paid enough) and from small businesses (citing high numbers of people who leave rather than complete the program). The numbers that have successfully found work through the program are fractional compared to the total number of unemployed in Georgia – yet this may be the big surprise that Obama prepares to unveil tonight.

The speech comes on the heels of the latest news that a grand total of zero jobs were created during the month of August. Given the “success” of the last stimulus in adding nothing but debt, we probably don’t want to be too excited about what gets proposed tonight.

We should, however, stay on the lookout for any mention of “malaise” or “crisis of confidence”. Personally, if we had to pick a Carter moment to replicate, I’d prefer the bunny rabbit.