President Obama has proposed a laundry list of Republican’s previous proposals for job creation. He is of course counting on the Republicans not passing this into law as it would be a dismal failure if enacted. Only 100 of the 400 billion dollar proposal is actual infrastructure work that would provide stimulus to the economy. This is 1/30 of the amount needed just to revitalize America without doing any expansion or modernization along the lines of what China is doing. Obama made reference to China in an effort to shame the Republicans into doing something, but this proposal is so anemic that Obama should himself be ashamed to compare it favorably to what China is doing.
The bulk of the proposal is payroll tax cuts but some of that is already in effect and is not new stimulus but rather just a defensive move to keep things from getting worse. Eric Cantor jumped right in, proclaiming that the Republicans could peel off certain proposals and pass them, like the 50% payroll tax cut for employers. This is the one aspect of Obama’s proposal that would do zero stimulus, so of course the Republicans can get behind that.
Obama did take the occasion to announce his intention to go ahead with mortgage refinancing at the current 4% rate which would save the average family $2000 a year. Obama pointed out that Republicans should be in favor of that sort of thing, he didn’t get any applause, in fact they will oppose it vehemently. It will cost their real constituents (the rich) billions. He made a point of saying he doesn’t need Congressional support to do this, this elicited more silence.
Obama also alluded to “other” unnamed things he intends to do without Congressional approval. The one really big thing he could do is a “Michelle Bachman” on gas prices. It’s within the President’s power to drive down commodity prices by restricting who can trade in the futures market, and by increasing the margin requirement to 50%. Rules to do this under the Dodd-Frank Law were to take effect early this year and are now tentatively scheduled for the end of year if there aren’t more delays.
The President’s speech was “political” or you could say it was educational in the sense that it again points out that Republicans are traitors. Obama also passed the buck to them on paying for the proposal by finding still more budget cuts. Something Republicans really don’t want to do, as real voters would find themselves on the receiving end of such cuts. He also suggested that they might raise Warren Buffet’s taxes to the level of his secretary’s, (gasps of horror).
In short, the things within Obama’s power to do, mortgage refinancing and energy price cuts would have far more effect on the economy than the Republican mish-mash he proposed in this speech. The only thing is that the economy will still be in the tank a year from now and Obama has to convince voters that he’s really doing something while the Republicans aren’t. Luckily for Obama the Republicans can’t figure out how not to play along as they are fully committed to their treachery. www.prairie2.com