Obama says he wants to put 447 billion dollars on the table for the fight against unemployment. Will he able to implement its plan? The proposed measures can they walk? Uncertainties abound. Barack Obama October 31, 2010.
Unemployment remains stuck above 9% in popularity to the lowest since his election … For Barack Obama, the fight for employment is the decisive battle of the last years of his term. He then presented a plan Thursday, the American Jobs Act, which promises to spend 447 billion dollars, 300 billion euros, to create and maintain jobs. And despite a budget deficit and a debt of a magnitude abysmal. Is a financial effort of the same level as the Stimulus Plan of 2009.It was 787 billion over two years while the effects of the new plan should focus on 2012.
Mark Zandi, chief economist at Moody's Analytics, quoted by Bloomberg as he believes could have a greater macroeconomic impact. Additional growth is estimated to be 2 percentage points and a one-point drop in the unemployment rate … provided it is fully implemented. For the first unknown of this plan is whether it will be voted on by the Republicans who have displayed more hostility. Aware of the political balance of power, Barack Obama has also favored measures likely to receive support, as this is tax cuts.He also insisted that Republicans had proposed similar measures.
Priority to the reduction of social charges
Obama can talk about his plan as a shock, its revenues have nothing very original. More than half of the plan – $ 240 billion – be used to offset reductions in payroll taxes owed to Social Security.
Employees could then see their 2012 employee contribution rates to 3.1% instead of the already improved rate of 4.2% they receive until the end of the year. Knowing that the standard rate of 6.2%. The objective here is to stimulate activity through consumption by giving purchasing power to them.The problem is that Americans are heavily indebted and some economists fear that some of this money ($ 175 billion, averaging $ 1,500 per family) rather don not in bank vaults in stores .
Companies are not forgotten. Obama breaks new ground even in the matter by proposing to cut the same way the employer contribution rate by half to 3.1%. A reduction that would apply within the first 5 million in payroll to benefit small first. All for a $ 65 billion.
Last "gift", also for companies: a total exemption from social security in case of creation of positions or salary increases. And within the limits of an increase of $ 50 million in payroll.So this is a direct incentive to job creation or wage increases (5 billion).
In total, the White House believes that such measures could create 50,000 jobs per month. Or 600,000 over the year 2012. That compares with the average loss of 35,000 jobs per month in the last quarter. But the New York Times also points out that companies must be able to offer more than 100,000 jobs each month just to cope with population growth
New aid to the unemployed
Here the opposition of Republican likely to be greatest. The White House wants to implement because it boasts as "the most innovative reform of unemployment insurance for 40 years."It aims to maintain the payment of allowances for part-time employees, trainees or unemployed entrepreneurs and set up a special tax credit for hiring long-term unemployed. Added to a fund to finance initiatives for the return to work in the direction of the unskilled and disadvantaged.
$ 140 billion of public investment
These measures Keynesian will involve upgrading transport infrastructure to the tune of $ 50 billion, and the creation of a National Infrastructure Bank. Obama hopes to win in each case the support of elected Republicans who have requested by a line of railway, is a bridge …A strong emphasis on education with the project to upgrade at least 35,000 public schools (30 billion) and freeze up to 280,000 job cuts for teachers, police and fire (at a cost of 35 billion). Not sure that this component easily passes the Cape of Congress.
Finally, two obstacles remain to the effectiveness of the plan of Obama. The funding, first. The U.S. president said he would be fully resolved in the process of reducing the long-term debt of some 1.5 trillion dollars. Task that was entrusted to a bipartisan committee that must report its findings in November. Barack Obama has promised to unveil his own proposals September 19, in the matter.
Then, the American Jobs Act, even if passed in its entirety, is not the absolute anti-crisis weapon. Its effectiveness will depend upon the strength of the economy.Thus the decline of social enterprises, a key measure, may well be theoretically effective, it is not enough to convince an employer to hire if the demand is not there. But the latest indicators in this regard are contradictory. For if consumer spending rebounded in July, trust her, fell in August to its lowest level since November 2008.