No Surprise. Obama Has No New Plan to Help Economy.

There were no surprises Thursday in Obama’s address to a joint session of Congress and the nation. 

Obama’s campaign speech showed he has nothing new to deal with the issues the country faces. When is he going learn that government spending to get out of recession does not work?

Then again, I do not think anyone believes this plan was intended to solve anything, other than be so bad it will have to be rejected by GOP so he can create an excuse for his failures.  

It is hard to believe one month ago he was insisting that we need more revenue to deal with the debt issue, and now he proposes extending the payroll tax reduction, which decreases revenue. This bad idea will get through since no one wants to oppose free money for voters. 

He proposes extending unemployment benefits which may be a nice welfare program, but no rational person would suggest subsidizing unemployment as a good way to reduce unemployment. Then, he proposes a new hire tax break, no one believes companies are going to hire workers to get $4,000. The best this will do is encourage hiring a worker who has been unemployed more than 6 months over another choice if all else is equal.

The worst idea in the speech had to be money for schools to hire teachers or repair buildings - supposedly to help education - but we all know this is to reduce pressure on states like California, Illinois, and others to follow Wisconsin’s lead and responsibly deal with spending without hurting key services like education. This is another version of "Cash for Democrats" passed just before the 2010 elections to get money to teachers unions to support Democrats, and has little to do with job creation.

Obama suggests we shouldn’t strip away collective bargaining rights to compete, which is not what anyone is asking. Limiting collective bargaining privileges was the right thing to do for public workers where it is corrupt to allow officials, who are sold out to unions, to bargain with those same unions. All we are asking is for his administration to stop harassing companies and attempting to force unions on companies with lawsuits like the Boeing case, unfairly discriminate against non-union companies by limiting their ability to get contracts, or other actions at the NLRB to unfairly help his union special interests.

I do have to give Obama credit for talking about reducing regulation.  This week they pulled back on the ozone regulations at the EPA, which is good. The problem is, even when he does the right thing he can’t be trusted long term. If he gets re-elected, we all know any regulation lifted now will be reinstated including more damaging regulations.  Uncertainty about the rules and cost of business are a major issue in this economy, which cannot be resolved in a positive way with Obama still president.

I will also give Obama credit for publicly admitting Paul Ryan is right that Medicare must reformed to preserve the program. It seems a bit late, as he had that chance months ago to be leader on this issue; but  instead, he chose to quit governing and launch his 2012 campaign. 

I hold little hope for real progress since we must deal with the fate of Obamacare to be able to deal with Medicare without cutting services allowed or paying providers less and shifting costs. Small business and people in the top bracket will be taxed at 44.8% under current law in 16 months leaving little opportunity to collect more revenue from the so called rich.

Finally, Obama was in a huge hurry to get this passed, just like everything else. There's no time to get it right.  Let’s pass it now, like the first stimulus that failed.

With the first stimulus, what recovery we did have, occurred before 2/3 of it was spent, which shows it had little effect. The school repairs will likely be done in the summer if that part is passed, it is months before the payroll tax cut expires, and the unemployment benefit extension is negative for the job picture so what is the hurry?

Obama’s plan is critically flawed, he is trying to spend enough to overcome the bad business environment he has created,  but his proposals will only make things worse.  Like the first stimulus, it is loaded with ways to pay back friends rather than any serious improvements that could payoff in the future.  I see no hurry to act on Obama’s big campaign speech.