As Obama stated in his state of the union address job creation is the number one priority for washinton this year. According to the latest statistics our economy rose at the fastest pace in 6 years. The president relayed this information to citizens in Baltimore, where unemployment is up to 11%. The economy is growing. The GDP rate of 5.7% shows us that. The president concludes as many would that because our economy grew so much that more customers will be willing and able to purchase this year. This plan would cost Washington $33 billion and help an estimated 1 million businesses. I feel like this plan will work really well in the short run and because of the tax credits will cause many companies to hire. However, my concern is how long will the tax credit last. If it is just this year and companies hire to get the tax credit because it saves them money then what will stop them from laying off when the amount of employees no longer saves them money because they no longer apply for the break in taxes. I am glad they are starting to get the ball rolling and take action on the unemployment rate, especially with Americans getting more and more impatient, but I am not sure this is the complete solution.
http://money.cnn.com/2010/01/28/smallbusiness/obama_jobs_plan/index.htm
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Sometimes I have to wonder if these stimulus bills and expensive plans are doing any good. The cure for all recessions is time. Markets go down, and markets go back up again. In the entirety of our countries history, this is how it's always been.
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Alex, time doesn't have an effect on the market like that. It's so easy to say that the market will just work itself out given enough time, but that neglects the diverse influences that worsen and better the economy. When OPEC restricted oil sales to the West, that was not (directly) the markets fault, and the actions take to counteract this were not its doing. One cannot hope to simply stand aside and let it loose to the whims of fate, expecting a good outcome. In 1929, abusive business practices and economic inequality helped drive the market, the country, and the world into a deep depression, only subverted by political action on the part of FDR.
ReplyDeleteIf I'm making pasta, I don't stand idly by staring at a pot of water, thinking that it might boil soon just because I know that others have boiled water in the past.
I think this is worth the try. Economics can only base the decisions they make off of what has worked in the past and the expectation of what holds in the future. President Obama is devoted to creating jobs and while there is a risk in whether his plan will work for the long-term it will help people financially regardless. There's no harm in this plan because both the firms and the people are benefiting.{A}
ReplyDeleteI am also relieved to see that our government is finally stepping up to do something about our increasing employment rate. Americans are indeed becoming impatient, and they are also suffering a great deal. Companies having an increased ability to hire is an ideal situation.
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