Despite its massive price tag of $450 billion, President Obama’s recently-proposed American Jobs Act seems like a useless dud to experts who’ve analyzed it, and the proposal was a big disappointment to struggling businesses.
As one newspaper notes, “business owners and financial experts reacted negatively to President Barack Obama’s Thursday night speech outlining his plan to boost jobs in America. Wall Street and investors in general were disappointed, said Chris Murray, owner of Murray Financial Group.” The so-called “American Jobs Act” is just a “‘ploy'” that “‘lacked any real substance,’ Murray said. ‘As far as Obama declaring class warfare on Americans who make $250,000 or more, that has proven to be counterproductive in the past and will be this time as well,’ Murray said. ‘Until clear leadership is displayed and sound policies are implemented by the administration and Congress, the economy won’t show any real measurement of improvement, stock market volatility will continue, and business and consumer confidence will remain depressed. It’s all about leadership, or lack of, at this point’. . .Scott McCaskill, a financial planner with Voso Financial Advisors, said the president’s plan came out much as analysts had expected: ‘A lot of excitement and promises, but very little detail and specifics.’ McCaskill said he had seen responses from other analysts who described the plan as ‘a lot of sizzle, very little steak.’”
Tom Porcelli, an RBC Capital Markets analyst, told The Wall Street Journal that he expected it to have “little” effect on hiring. “Mr. Porcelli was skeptical that the short-term employer tax breaks would prompt job growth. ‘I don’t think that you’re at the stage where small businesses are incentivized to hire,’ because demand is still so low, he said. ‘These companies are basically still trying to hunker down and hope that they’re around in the next year.'” “Larry Schaffert, owner of Schaffert Construction, said Obama is ‘totally clueless of what it takes to run a business.'”
Business leaders do not think Obama’s plan would succeed in getting America’s economy growing, nor do they think it would get “unemployed people back to work”: “Business executives say it will take more than tax credits proposed by President Barack Obama to convince them to expand their payrolls to help get thousands of unemployed people back to work. Instead, they’d prefer an easing of the regulatory environment and an overhauling of the business tax structure, which would lead to lower operating costs.”
Employers cited in The New York Times said Obama’s jobs plan would not result in their hiring any additional employees: “David Catalano, who helped found Modea, a digital advertising company in Blacksburg, Va., said that he was wary of the president’s pledge to ask the ‘wealthiest Americans and biggest corporations to pay their fair share.’ His company was organized as an S Corporation, in which profits are passed through to shareholders, so it would face higher taxes under the president’s proposal, he said. He added: ‘My partner and I have reinvested 100 percent of the profits that our agency has made over the last five years back into the company. If the government takes a bigger share of that from me, it directly impedes my ability to grow the agency.”
Obama’s proposal would give taxpayer subsidies to certain employers that hire certain favored categories of people, like disadvantaged low-income youth. But that probably wouldn’t lead to any additional hiring, but rather will simply funnel money to companies for people they would have hired anyway, or result in companies’ changing who they hire, hiring a favored category of person rather than the most qualified person for the job. “If I get a $4,000 benefit for hiring you and I pay you $80,000 and you’re going to sit at your desk and do nothing because there’s nothing to do,” said Marty Regalia, chief economist of the United States Chamber of Commerce, “then the businesses aren’t going to hire you.”
Economist Chris Edwards says that Obama’s proposals are “full of bad ideas” that will do economic harm. I previously explained some of the economically harmful aspects of Obama’s “American Jobs Act” at this link.
People should take Obama’s claims about “job creation” with a grain of salt. His earlier claims about creating jobs turned out to be false. The Obama administration said that if the $800 billion stimulus package passed, unemployment would not go above 8 percent, but it actually skyrocketed to 10.3 percent less than a year later. The “green jobs” the Obama Administration promised to create in the stimulus package are largely non-existent. Indeed, the stimulus package’s green-jobs provisions ended up inadvertently outsourcing American jobs to China. As the Associated Press notes, Obama is also not leveling with the American public when he minimizes the budget-busting nature of his so-called “American Jobs Act.” That lack of fiscal honesty is nothing new for Obama, who falsely promised a “net spending cut” in 2008, only to immediately propose massive budget increases once he was elected, including proposed budgets that would add $4.8 trillion to the national debt.