Heritage: Job Growth Should Be Stronger
by Mike Brownfield, www.Heritage.org February 3, 2012
The Obama Administration and the nation have cause to breathe a sign of relief as today’s monthly jobs report shows 243,000 jobs were created in January. Those numbers are of course good news, another positive sign of recovery, and another clear indication of the enduring strength of the American economy and American economic system. But, really, so long after recession’s end, we should be doing much better — and would be but for President Barack Obama’s debilitating anti-growth policies. In reality, the economy is recovering despite — not because of — Obama’s policies. Make no mistake: 243,000 jobs is good, but we should be seeing numbers upwards of 350,000. America can and should do better.
For millions of Americans, last month’s strong job growth is a bright spot that they unfortunately cannot see. While the unemployment rate has fallen to 8.3 percent, it fell from lofty heights that lasted far too long. And even at 8.3 percent, 12.8 million Americans remain unemployed, and the high unemployment among women, teenagers, whites, and Hispanics remained steady. What’s more, the number of long-term unemployed — which stands at 5.5 million — remained relatively unchanged, meaning that 42.9 percent of unemployed Americans have been out of work for 27 weeks or more. On top of that, there were 1.1 million “discouraged workers” in January — meaning that they’re sitting on the sidelines not looking for work because they believe no jobs are available.
But what do all these numbers mean? Let’s put today’s job report into context using the President’s own words — promises that weren’t mentioned in the President’s State of the Union address. In January 2009, President Obama’s advisers produced a chart projecting that with the President’s economic plan, the unemployment rate would plummet to levels much lower than those we’re seeing today. And the President pledged that if his trillion-dollar stimulus plan were enacted, unemployment never would rise above 8 percent — a promise that has been broken every month since the stimulus became law.
For years, millions of Americans have been suffering the effects of economic policies that hinder growth. Even with the creation of 243,000 jobs, that path to full recovery is going to be an incredibly slow one. The Heritage Foundation’s Rea Hederman, Jr. and James Sherk wrote last month, “If employers add an average of 265,000 net jobs per month–the rate the payroll survey showed between 1997 and 1999 — then unemployment will not return to its natural rate until December 2014.” Contrast that with the President’s projections, which predicted that today only six percent of Americans would be unemployed.
So what is the President now proposing to speed up the economic recovery? Temporary tax cuts that don’t create new jobs and threats of higher taxes on job creators, with the latter leading to the same sort of uncertainty that has helped drag down America’s recovery. Those tax policies aside, President Obama has failed to take the necessary measures to get the country’s deficit under control. A new report this week shows that the country’s budget outlook is getting worse, not better, with 2012 being the fourth straight year of trillion-dollar deficits. The principal cause of this budget crisis? Entitlement spending, especially on Medicare, Medicaid, and Social Security. President Obama was silent on these matters in his State of the Union address, but he will have another chance to demonstrate leadership when he releases his budget in a few days. Hopefully, he won’t give the fiscal crisis the silent treatment again.
Though today’s job growth numbers are good news, it’s the equivalent of winning a foot race with a cinder block strapped to your leg. Sure, you might cross the finish line, but you could get there a lot faster if you cut off the dead weight. America’s economy is struggling to break free from the dead weight of debt, reckless spending, uncertainty, over-regulation, high taxes and a convoluted, counterproductive tax code. Heritage’s Saving the American Dream plan proposes real solutions to fix the debt, cut spending, reform the tax code, and enable America to get back on track for the sort of rapid economic growth that the U.S. economy so desperately needs.
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