Here’s a quick summary along with my comments. I’m clearly trying for the insta-pundit title.
1. A one-year extension of the payroll tax reduction.
Comment: repeat after me. Temporary tax changes don’t change economic behavior. Employers hire workers for the long term. A one year tax break is like trying to fill the Grand Canyon with a teaspoon. (Less polite metaphors did occur to me, but I’ll leave that to you.)
2. An additional $60 billion in spending to extend unemployment insurance benefits through 2012 and funding initiatives for Americans who have been out of work for more than six months.
Comment: President Obama’s new chief economic adviser, Alan Krueger, has published several studies that show a direct relationship between the duration of unemployment benefits and the duration of unemployment. Other than that, I’d like to see the specifics of these new “initiatives.” I suspect it will be more of the same, training programs that prepare people for jobs that no longer exist, and so on.
3. Another $85 billion in aid to state and local governments, including cash for hiring teachers and refurbishing schools, as well as a $10 billion infrastructure bank and $50 billion for transportation projects.
Comment: keeping teachers from getting laid off can’t hurt. But what’s with the infrastructure and transportation projects? Wasn’t that the point of the ARRA (the original stimulus)? Mr. Obama still doesn’t get it. There’s relatively low unemployment among highway construction workers. But you can’t magically transform someone who’s been working construction into someone who can build highways.
Like many people, I’ve heard quite enough from this president. He would do well to just stay out of sight for a month or so. Notice that there was no mention of the real 900 pound gorilla: the administration’s job-killing regulations that spew forth from the EPA, the NLRB, and, of course, ObamaCare.
Prediction: the unemployment rate will still be above 9% on September 1, 2012. I do not enjoy making this prediction. But I just don’t see anyone in Washington, D.C. who really understands the problem.