Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Obama's Jobs Plan Will Barely Dent Unemployment

Politics / US Politics Sep 12, 2011 - 07:00 AM GMT

By: Money_Morning

Politics

Best Financial Markets Analysis ArticleDavid Zeiler writes: Even if passed intact, U.S. President Barack Obama's jobs plan, though ambitious, would at most nudge down unemployment by a single percentage point over the next year.

Furthermore, the Republican-controlled House of Representatives will surely object to several provisions in the American Jobs Act - particularly the total $447 billion price tag - further diluting its impact.


President Obama's jobs plan includes:

•Tax breaks for both individuals and businesses.
•Financial aid to states aimed at repairing schools and retaining public sector jobs such as policemen and teachers.
•An extension of unemployment insurance.
•And money to repair and upgrade transportation infrastructure, such as highways, railroads, and airports.

Wall Street, already worried about events unfolding in Europe, seemed less than impressed by the proposals. Stocks started down Friday, the morning after President Obama's jobs speech, and meandered lower throughout the session. The Dow Jones Industrial Average slipped 2.69%, while the Standard & Poor's 500 Index dropped 2.67%.

"There was nothing in the president's speech that would inspire the stock market one iota forward, and I think we can see that reflected already this morning," Money Morning Capital Waves strategist Shah Gilani said on the Fox Business Network program "Varney & Company."

Pressure to Act
Congress will feel pressure to at least pass a watered-down version of Obama's jobs plan if only because both parties are wary of the public anger over the gridlock and bickering that took place during the summer's debt ceiling debate.

In fact, some Republican lawmakers did sound more conciliatory than usual.

"I heard plenty in the president's speech last night where I think that there is a lot of room for commonality and we can get something done quickly," said House Majority Leader Rep. Eric Cantor, R-VA, in an interview on CNN's "American Morning."

Cantor suggested the two parties "set aside" some of the issues on which they strongly disagree, such as the proposed "infrastructure bank," and concentrate on the few areas of mutual agreement, such as tax breaks for small businesses and infrastructure spending.

The cooperative tone was not universal, however. Senate Minority Leader Mitch McConnell, R-KY, knocked President Obama's speech Thursday morning - hours before it was delivered.

"This isn't a jobs plan; it's a re-election plan," McConnell said on the Senate floor.

Analysts predicted Congressional Republicans would try to cherry-pick the parts of the American Jobs Act that fit their governing philosophy while rejecting the rest.

"These payroll tax reductions are the proposals that have the greatest chance of getting passed by Congress because it will be harder for Republicans to vote against proposed tax cuts," Paul Ashworth, chief U.S. economist for Capital Economics, told Reuters.

Republicans are almost certain to reject proposals such as the aid to state and local governments and extending unemployment insurance. Back in June of 2010 Senate Republicans blocked an extension of unemployment benefits, saying it would add to the federal deficit.

And that was before the election of dozens of fiscally conservative Tea-Party Republicans, who tend to object to new spending of any kind for any reason.

Paid For ... Or Not?
Obama said in his speech that his proposals would be paid for, although he later explained that would mean adding another $500 billion to the $1.5 trillion in savings that the Congressional "super committee" is charged with trimming from the federal budget. Those recommendations are due Nov. 23.

The president said he would submit a new deficit-reduction plan on Sept. 19 that would include spending cuts, adjustments to Medicare and Medicaid, and closing tax loopholes for corporations as well as wealthy individuals.

Making the jobs creation bill part of the contentious deficit reduction battle may come back to haunt President Obama, who might need to sacrifice many of his proposals just to get anything passed.

For all its good intentions, not enough of Obama's jobs plan will survive to make much of a difference.

"Nothing that's likely to get done is going to have a meaningful impact in terms of lowering the unemployment rate and creating jobs," Neil Dutta, an economist with Bank of America Merrill Lynch told Reuters.

Source :http://moneymorning.com/2011/09/12/obamas-jobs-plan-will-barely-dent-unemployment/

Money Morning/The Money Map Report

©2011 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or 72 hours after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in