Saturday, February 5, 2011

Tolls Ahead

Yesterday, the U.S. Labor Department reported that the unemployment rate has dropped to 9 percent (down from December’s 9.4 percent and November’s 9.8 percent), the biggest two-month decline since 1958. Although this still means that millions of Americans do not yet have jobs, it does prove that our country is making progress and recovering from the worst economic recession in decades.

Many cynics are quick to point out that the growth in private sector jobs in January (over 50,000 new jobs) was not as many as we hoped for. However, they fail to take into account that the number of jobs added in both November and December was more than expected, and that we have had 11 consecutive months of private sector job growth.

President Obama has done an excellent job to build on this momentum, passing tax cuts for millions of middle-class families; proving tax incentives for small businesses; ensuring fiscal responsibility and accountability for Wall Street companies; investing in education programs that will help us compete with the rest of the world; and most recently launching “Startup America,” a national initiative to support high-growth entrepreneurship, with more than $400 million in private commitments.

While Obama and the Democrats are making progress, however, it seems that many on the right are trying to move backwards. Instead of focusing on creating and sustaining long-term job growth, many Republicans are trying to undo many of the successes we’ve had over the last two years.

In particular, they have vowed to use their new majorities in Congress to overturn the Affordable Care Act (the new healthcare law), of which many of the provisions have just recently been taken into affect. Specifically, people can no longer be denied coverage due to a pre-existing condition; young adults can now stay on their parents’ health plan until they turn 26; and seniors who used to pay thousands out of pocket to cover the “donut hole” are now paying less.

Ironically, these same Republicans that want to deny millions of Americans healthcare are quick to accept their own healthcare benefits that are generously provided to them by the new law. Apparently, it’s fair to subsidize the healthcare costs of those that are well off than those that are jobless and already have difficulty paying their bills.

If we are to truly improve our current financial state, we need to ensure that our citizens have all the available means necessary to get their lives back on track. This includes healthcare.

As was said during the midterm election, drivers, “push D to go forward, and R to go backward.” The U.S. has gotten itself out of the ditch and is moving forward. But now, it needs to avoid the tolls.

5 comments:

  1. Its not that republicans are trying to undo of the successes, they don't believe they were successes. They see a fundamental problem in some of the legislation and don't agree that it is reasonable to go forward when we are setting ourselves up for trouble in the future

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  2. Why are ALL Republicans hypocrits? Why cant they understand what a success actually looks like?

    The only thing Republicans care about is enriching the rich and destabilizing the unstable.

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  3. Job creation is one of the most significant issues we have today. Unemployment is decreasing, which is amazing, however much work still needs to be done. The Republicans need to relax and for once, understand the side of those who are trying to get by in these times.

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  4. Unemployment is only decreasing because of the hundreds of thousands of workers that have left the workforce. Private-sector job growth, while positive, has been too low. As soon as these people re-enter the workforce, unemployment will go up again. That will hit consumer sentiment, which will hit spending, which will hit GDP, and the cycle will start all over again.

    Cynical, yes, but it's inevitable. You can't add 40,000 jobs per month in a country with a population of 300m and have the unemployment rate go down .4%. Something is screwy, and it will come back to bite us in the next couple of quarters.

    We need an economic catalyst to get us going; in the past, this meant big war, technology, etc. Some say this time it will be the power of globalization. I'm not sure about that. I see globalization taking more jobs away from our country--after all, we're not that big on manufacturing exports.

    So what will it be that get's us going? Who knows? I hope we can figure it out soon, or American growth is going to be difficult to sustain.

    As for Obama, I think he's done the right thing by appealing to small businesses, cutting middle-class taxes, and announcing new education programs. The problem now is that by trying to please everyone, we're even more broke than before. On this scale, tax cuts and spending should be mutually exclusive. Although his intentions are good, Obama is playing a dangerous game with taxpayers' money--one that we all better pray does not backfire.

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  5. To respond to the recent post by “Steve”:

    -I understand your argument. It is partly true that one of the reasons the rate has fallen is because some people without jobs have stopped looking. However, what this fails to take into account is that many of these people have stopped looking because they either returned to school or became self-employed (the U.S. Labor Department reported that the number of self-employed people rose last month).

    -Yes there are still nearly 14 million people unemployed, which needs to be fixed. I don’t, however, think we are on the wrong track to decreasing that number.

    1) Two years ago, we were losing over 700K jobs a month. Now we’re adding jobs.

    2) The service and manufacturing sectors are growing at pre-recession rates. A recent report by the Labor Department states: “the manufacturing sector added 49,000 jobs, the most since August 1998. Retailers added 28,000, the most in a year. Manufacturing output has grown for more than a year, and retail sales for January posted their biggest gain since 2005.”

    3) S&P companies are reporting larger profits than last year; and the Dow Jones industrial average closed above 12,000 this week for the first time since 2008

    4) Those with jobs are earning higher wages.

    5) Businesses have cut back on layoffs

    6) Also, the fact that the rate has dropped influences consumer behavior because it influences their perception of the economy. It lifts consumer confidence. This may explain why retail sales have reached a 5-year high.

    People are spending more. Businesses are hiring. We still have a lot more to do, but we’re definitely not on the wrong track.

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Do You Agree or Disagree? Why? Please leave comments.