That didn’t take long. President-elect Barack Obama is still two months away from taking office, yet he’s already begun announcing his plans for how to fix the U.S.‘s moribund economy.
Observers shouldn’t be fooled into thinking he’s found the magic bullet for all that ails the nation, however. Often overlooked in his various economic plans is the fact that his promise to create 2.5 million new jobs over his first two years is a gross estimate, and not a net projection. Considering that the country shed about 1.2 million jobs this year, it’s looking likely that we will find ourselves at an overall loss of jobs, even if Obama is able to follow through.
It also shouldn’t be overlooked that many of his ideas will require congressional approval. While Democrats control both houses of Congress, they still lack the numbers needed to force through any legislation in the face of united Republican opposition — a scenario that doesn’t even include the possibility that he may face dissension in his own ranks.
Also important is realizing that although earlier in the year Congress may have been willing to hand out money whenever asked, the lack of action following the request by the Big Three car companies might be a sign that the taps may have been turned off. Considering that Obama is already indicating that he’ll be asking for more than the $175 billion he originally foresaw asking for, passage is by no means a done deal.
Still, the fact remains that something must be done. It’s heartening to see that Obama has fixated on the problem of jobs and job creation. His plan to reward companies for expanding their workforce beyond current levels with $3,000 tax credits per each new job recognizes that without people working and earning money, the economy simply cannot improve.
Among the most interesting of rumors swirling around his transition is the idea that he may choose to not immediately repeal the tax cuts for the wealthy that President George W. Bush pushed through early in his first term. Instead, he would allow them to naturally expire after 2010. One major advantage to the move would be a likely shoring up of Republican support for any other moves that he would wish to make.
If nothing else, it’s important for Obama to get people to believe in both him and his ability to get the nation back on track. Luckily, there’s been at least one sign that he’s succeeding thus far. After word leaked of his selection of Tim Geithner, the president of the Federal Reserve Bank in New York, for Secretary of the Treasury, the stock market saw an immediate gain of nearly 500 points, a clear sign that Wall Street approved of the choice.
However, it’s important that Obama also be able to reach beyond simply the financial sector and get the rest of the nation to line up behind him. To truly succeed he needs to get people spending money again and hiring new workers.
Simply put, if Obama can’t do the job he was elected for and turn this troubled economy around, we’re all in for a lot of trouble.
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