Our elected leaders have been unable to manage our economy.
The current political firestorm over the employee portion of the FICA payroll tax is all about politics…and it looks like the GOP has fallen into the Democrat trap. Imagine President Obama and the Democrats are the responsible tax cutters and after a huge bi-partisan vote in the Senate, the House GOP makes the Dems the middle class tax cutters. I repeat this all about the politics – not policy.
A History – Immediately after the 2008 election both parties were hawking their versions of what should be in an economic stimulus bill. The President Elect said pass his plan and employment would not exceed 8%. Well we saw how well that has worked. We even were told we would have a Summer of Recovery and we had several Jobs Summits (PR events).
We passed the Obama $870 Billion Stimulus Package (really nothing more than a Democrat Pork Barrel Spending Bill – see my contemporary post on Stimulus - What Stimulus?).
Without admitting failure the President has said, the economy was worse than he thought and he even admitted maybe there were not as many shovel ready projects as he thought.
In the 2010 elections the GOP Kicked Butt, regained a Majority in the U S House and gained Senate seats. The Obama economy was the issue. In the lame duck session after the election, our Congress were tripping over them selves to fix the economy. They extended the Bush era tax cuts, extended unemployment insurance eligibility to an unbelievable 99 weeks, and despite very weak long term Social Security finances cut the employee contribution to Social Security by 2%. This is a considerable number, estimated to be about $110 Billion annually.
Not to worry, it will stimulate the economy the President told us; in fairness the GOP went for it too because it extended the Bush tax cuts and who can be against lowering taxes – right?
Unbelievably and it is contrary to pretty accepted economic theory the payroll tax cut did not stimulate the economy. More unbelievably (because Round 1 was not working) the President has called for the continuation in his new and improved so called Jobs Program.
With the failed vote yesterday in the U S House, we are in what seems to be the ultimate finger pointing imbroglio. And if you think this isn’t about playing gotcha remember the GOP put the President in a box too with their sidebar issue of the Trans Canada Pipeline decision.
Epilogue – What is holding back our Economic growth? It’s not taxes and it’s not increases government spending. It is CONFIDENCE in our economy. Consumers are not spending and Businesses are not spending, investing, or hiring because they do not have Confidence in our economy.
There are a few positive signs but there will not be substantial and sustained spending until there is consistent leadership. Clearly it starts with the President (Obama is a disaster and has shown little if any leadership on the economy. He gives great speeches but he’s a Waffle House. His menu changes daily.) Lack of leadership extends to the Congress as well. They act like the Keystone Cops. Honestly there are many good people in the Congress but their results look like the inmates are running the asylum.
Endbar – Principles are important but they are a means to an end, not the end. The people want problems solved, sometimes to make progress it requires compromise and yes giving a little to get.