While most people were taking their last vacation before the grind to Thanksgiving, President Obama announced a new $50 billion infrastructure spending plan to boost employment as well as a permanent extension of R&D tax credits. Then today, the administration signaled they will announce a new tax break for plants and equipment.
Will these new plans benefit the economy and reduce unemployment?
“The only path back to robust growth and prosperity is to stop this agenda dead in its tracks, and then by stages to reverse it,” opines the Wall Street Journal. Stimulus I cost taxpayers $168 billion. Stimulus II cost taxpayers $814 billion. Plus, the Federal Reserve has reduced interest rates to zero and expanded their balance sheet over $2 trillion. All we have to show for it is a 1.6% recovery and hardly a dent in unemployment. Let’s not rinse and repeat.
You Better Believe It
Ben White at Politico says, “It’s all part of an aggressive White House effort to both boost a struggling economy heading into a difficult midterm election — and, in the case of the investment credit, to reverse a long-standing perception that the administration is hostile to the interests of big corporations.” This money will help businesses free up capital to hire new workers and transact new business.
Who Cares? It Won’t Pass Anyway
“Given a tight work schedule, plus Capitol Hill’s bitter partisan atmosphere, it’s unlikely that Congress will pass Obama’s new plan prior to the November elections,” says Peter Grier in the Christian Science Monitor. “Following that, expected GOP gains would make passage of such new efforts much more difficult.” So, get back to your post Labor Day work and don’t waste time loving or hating the new plan.