COMMENTARY | President Barack Obama and the Republican-led Congress must work together to solve the unemployment crisis. Unemployment continues to drag down the American economy, and it is America's primary economic and social problem. Both the Obama administration and the Congress lack a program to solve the unemployment crisis.
In his State of the Union speech, the president clearly demonstrated that he has compassion for the unemployed. He proposed a program which emphasizes innovation to expand the American economy and put the American people back to work. Overall, however, his policies are making things worse.
Upon taking office, the Obama administration developed an $800 billion stimulus package to fight the recession. The recession ended a few months later with less than $ 100 billion having been spent. The administration should have shifted to a policy geared toward economic recovery, but foolishly kept on spending. This resulted in an escalating debt without job growth.
The Republican-led Congress is not doing much better. In January, it initiated a program of debt reductions based on immediate cuts in spending. The Republicans proposed a limited $60 billion cut from a $3.7 trillion spending package. This is obviously too little too late.
The economic policy of the U.S. is in limbo. The Obama administration and Congress are going in opposite directions. The administration continues to emphasize fiscal pump priming while the Congress is pursuing budget cuts. Rather than pursuing divergent policies, the administration and the Congress should pursue policies that promote economic growth and can put the American People back to work.
Ultimately, economic growth comes from incentives to make capital investments in the economy, to innovate while producing, and to work better and longer. Higher economic growth will produce jobs and simultaneously reduce the national debt. This is exactly what happened in the late 1990s when major tax cuts on capital investments and other pro-growth policies led to economic growth, new jobs, increased revenues, and a budget surplus.
Sources
Timothy Kearney, Ph.D., Divergent political policies in Washington hamper nation's economic prosperity, The Citizens' Voice, March 23, 2011.
President Obama's State of the Union Speech, January 2011.
http://www.associatedcontent.com/article/7689494/obamas_speech_reflects_reporting_at_pg2.html?cat=75
http://www.npr.org/blogs/money/2010/08/03/128950986/high-unemployment-keeps-dragging-the-e
conomy-down?sc=emaf
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