Time Has Come for Whitehouse to Present True Job Creation Plan

Posted by Michael A. Kamperman on October 20, 2009

The Whitehouse needs to stop defending the stimulus plan and come forward immediately with a big and bold job creation plan.  The one part of the stimulus plan that most people agreed would create new jobs was fast forwarding funding for shovel ready infrastructure jobs.  Well don’t hold your breath.  Proof has just emerged that the stimulus plan is not only failing to create infrastructure jobs as promised; it is now failing to save even previously budgeted infrastructure jobs.  A few days ago federal and state transportation officials told local planners in Texas they would need to significantly restrict their previously budgeted spending on roads and bridges for the next two years.  In fact, the only money available for state and federal highways is whatever funds local transportation authorities have received directly from the stimulus plan, and nothing else.  The Waco Tribune Herald quoted Waco MPO director Chris Evilia as saying “If it’s not economic stimulus, it’s pretty much a no go for the next two years.”  She described the turn of events as a “complete meltdown.”  The Waco area is slated to receive $7.2 million from the stimulus plan for roads and planned to use the money for a needed overpass on highway 6.  Still, the stimulus money will not be diverted to higher prioritized projects but to routine road maintenance.  Without stimulus money the area already planned to widen parts of I-35 and to build an overpass on highway 84.  Those two top priority projects will now have to wait for future funding, since the expected annual road money is no longer coming.

 

We are in a federal and state funding crisis due to a lack of tax receipts because of the economic crisis.  Jobs widening I-35 that would have existed anyway without the stimulus plan will now not exist even with the stimulus plan.  It is simply stunning things are unraveling so fast at the federal and state level.  It is imperative the Whitehouse put together an emergency spending bill to restore fully all budgeted transportation funds without using funds from the stimulus plan to cover the normal budget.  The word stimulus means an extra spark.  It does not mean replacement money.

 

There is no doubt we need much higher levels of federal spending to stabilize the economy.  There is no doubt the Federal Reserve needs to print a lot more money.  What is doubtful and what is an open question is whether or not President Obama has the wisdom and the courage to stand in front of the American people and tell them the economic crisis is proving to be more severe than he and his advisers realized.  He must come forward with a one trillion dollar job creation program as a minimum down payment if he wants to see unemployment go down.  It is also doubtful whether or not Fed Chairman Bernanke will push through another round of quantitative easing at the Fed’s next meeting.  The economic crisis will not end until the President is willing to use all of his political capital on creating jobs.

 

I need to offer a mea culpa and a retraction.  Earlier I attempted to coin the phrase the “Great Unraveling” as a term to describe how the economic dominoes are continuing to fall into each other causing more and more economic losses.  The recent cut in highway funds is a perfect example of why we are in a depression and why it is not close to being over.  However, it has been brought to my attention that Paul Krugman published a book in 2003 titled The Great Unraveling: Losing our Way in a New Century, which is a collection of his New York Times columns railing against President Bush’s economic policies.  At least I have seen Professor Krugman forced to issue retractions of his own.