(REAL TIMES MEDIA)—Last week the White House announced the new unemployment numbers and they weren’t good. While over 103K new jobs were added to the economy the unemployment rate stayed steady at 9.1 percent. How exactly does that happen? The reason is because to truly improve the economy it requires a commitment on the part of one party, Republican or Democrat to a set of policies without deviation. It requires steadfast implementation of one economic philosophy and the courage to stick with it even if it is not immediately successful. The problem right now, for any voter out there that is looking at the presidential race is that there may not be any real options for improving the economy.
Let us clear up a few facts about why the nation is in its current condition. For over a decade we have been engaging in wars in the Middle East that the nation cannot afford. Afghanistan and Iraq are huge drains on the U.S. economy and the Bush Tax Cuts, which were supposed to stimulate the economy, have resulted in a lower tax base for the U.S. to draw upon to fund both wars. On top of this you had massive speculation and merging of banking and finance agencies that created a web of interconnectivity so intense that when banks began to go belly-up due to wild investment, insurance companies, mortgage companies and just about everything else got dragged down with them. Imagine if your home phone, cable and Internet all come from one company and that company goes bankrupt, all of your home entertainment and communication go down with it. That’s what happened to our economy.
So the question facing any political party right now seeking to retain or gain the White House is “What are you going to do to solve this problem?” Let’s look at the Democrats and Obama in particular and see what their solution has been. It’s been pretty clear from Day 1 that the Obama White House is not going to bring anyone to justice over the financial crisis that has borderline bankrupted this country. It’s the classic American axiom that if you steal $100 you go to jail, if you steal $100,000,000 dollars you get a congressional hearing. Obama’s plan to improve the economy has been a very middle of the road approach, the stimulus being a classic example. Taxes for some companies are cut while at the same time direct government investment goes into small businesses, cities for infrastructure projects and some emergency situations across the nation. This middle of road approach kept things from getting worse but has not vastly improved the economy. Why? Because when you use tax money to invest in the economy but then cut government spending by laying off federal employees, you end up putting people out of work at the same rate that you’re investing in the economy. That’s how you can add 103K jobs but unemployment stays at 9.1 percent because federal budget cuts have put thousands of people out of work. You either have to invest or simply cut to bare bones, the middle of the road approach isn’t working.
What does the Republican side offer? Cuts, cuts and more cuts. The GOP plan by just about every presidential contender is to cut even more government jobs, and then lower taxes even more on corporations which will encourage them to hire. This plan can be credited for consistency but it does not work in the real world. From a small business owner’s perspective why should a $5,000 tax credit result in me hiring a new employee at $20,000 a year? Cutting more government spending sounds nice in the abstract but each government ‘cut’ is someone’s job and thus what is the value to the economy of cutting a million dollars in government spending if it results in 5 more people in the unemployment line?
So here is what we are stuck with as voters. A Democratic party that goes in half-way on an economic plan that is ultimately self-defeating, you have to invest first, then cut spending. Both at the same time aren’t working when we’re in a hole. The Republican side is offering across the board cuts in spending and taxes that will not result in any new job creation because there is no incentive to take found money and put it back into the economy. This is the decision that any objective independent voter has to make in the next 10 months; my only hope is that both parties find economic solutions that are better than what they’re offering now.
(Dr. Jason Johnson is an associate professor at Hiram College in Ohio.)