A scathing initial assessment . . . from a bastion of liberal journalism.
Obama jobs plan may provide no more than quick,
temporary fix
Short-term spending boost can't repair deeper damage to the U.S. economy, experts say.
by John W. Schoen
Senior producer
MSNBC.com
Even if President Barack Obama can win political support for a sweeping new government program to create jobs, he may have a tougher time providing more than a temporary, quick fix, say economists.
The real problem, they say, is that households and governments are still recovering from the widespread damage done by a historic borrowing binge that will take years to repair.
The details of the White House's jobs proposal, to be laid out in a much-anticipated speech Thursday night, are still being finalized. The plan is expected to call for increased federal spending to rebuild roads, bridges and other infrastructure across the country. Republicans, who control the House of Representatives, so far have rejected the idea as wasteful spending.
"We need to do things that will have a direct impact in the short-term to grow the economy and create jobs and the president will put forward proposals that will do just that," White House spokesman Jay Carney told a news briefing on Tuesday afternoon.
In any case, more fiscal stimulus may not be enough to fix what ails the U.S. job market, say some economists. A decade of unsustainable borrowing by consumers and governments artificially boosted economic demand. The resulting debt hangover has sharply curtailed spending.
"You can't manufacture demand if you're going to look at demand from the same place as we always have gained demand, which is through the consumer sector," said Steven Blitz, senior economist at ITG Investment Research. "That's because the consumer is tapped out."
There is no mystery why Obama feels a need to act for both political and economic reasons.
On Friday, the government reported a net gain of zero new jobs in August, leaving the national jobless rate stuck at 9.1 percent. Weak job growth in the private sector was entirely offset by government layoffs, mostly at the state and local levels. In the past three years, state and local governments have eliminated 671,000 jobs in an effort to balance their budgets.
Even before that report, Obama's popularity was falling to the lowest levels of his presidency. An NBC News/Wall Street Journal poll conducted in late August showed Obama's overall job approval rating at a low of 44 percent, down 3 percentage points from July, while only 37 percent approve of his handling of the economy. Two separate, independent polls showed similar results.
Full story: http://www.msnbc.msn.com/id/44408524/ns/business-eye_on_the_economy/
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