Obama has botched the recovery

I'm glad Con stepped up and took the debate challenge. The issues we are discussing are important, especially with elections coming up. We know the Obama recovery policies have failed because the U.S. is sorely lagging other nations: "According to the Trading Economics website, which collected unemployment data for 31 countries from January 2009 to June 2009, America's unemployment spike was worse than 26 of the other nations studied. Eight saw unemployment go down. On average, unemployment increased by 0.8 percent, less than half of the U.S. rise. ... It takes some serious political gymnastics to avoid the conclusion that Mr. Obama's stimulus made unemployment worse and will continue to do so. While unemployment rates in much of the rest of the world are falling, American joblessness continues upward." http://tinyurl.com... 1. One reason that the economic stimulus package was a failure was that it did not put money into the economy fast enough to provide stimulus. We are 19 months into the program and between 40 and 50 percent of the money has not been spent. The only part that made it into the economy quickly were the short term tax cuts. That was the part inspired by Republicans, and indeed that money did some good. But that quickly ended. The failure of the bill is due to it's failure to provide the quick shot that the economy needed. Why did the Obama financial team fail to assess the depth of the recession? All the numbers were available when they proposed the Stimulus. They simply did not understand what was going on. That is part of the reason they botched the recovery. President Obama promised that the recovery.gov numbers on job creation would be accurate. Only after they fell short was CBO tasked to come up with creative new measures of job creation. The Government Accountability Office (GAO) assessed jobs created by the Department of Energy under the Stimulus and found that each job cost a whopping $194,213. http://www.ktvz.com... 2. Con said I did not offer a reason to believe that businesses are not investing because they are nervous. the reason I gave, in (2) was that there is $2 trillion in potential investment money sitting on the sidelines. The situation is well understood by professional economists: ""... according to a new survey, which represents the consensus of a panel of 242 members of the National Association for Business Economics. ... Three-quarters of survey respondents said that President Barack Obama's administration and Congress should do more to support job creation. The best way to do that, according to 41 percent of the survey respondents, is for government to give clarity on future regulation and tax policy." http://tinyurl.com... The Wall Street Journal summarizes: "What's missing in these times is a strong desire among businesses and consumers to take on new debt, low rates notwithstanding. Corporations can't even decide what to do with all the surpluses their businesses are generating; they are sitting on vast amounts of cash even though it is earning them minimal investment returns. ... The key word here is "uncertainty." The Obama administration and Congress have dumped a huge load of highly dubious new legislation on Americans, much of it unread even by the legislators who voted for it. ObamaCare is an attempted federal takeover of a vast and complex industry. No one really knows how much chaos the financial sector "reform" act will generate. Hyperactive zealots in federal bureaucracies such as the Environmental Protection Agency have been unleashed to do silly things like attempt to reduce the planet's supply of carbon dioxide." http://tinyurl.com... The articles goes on to quote the chairman of the Dallas Federal Reserve, "The prevailing sentiment among business leaders he surveys monthly, Mr. Fisher said, is that 'the politicians and officials who craft and enforce the rules are doing so in a capricious manner that makes long-term planning difficult, if not impossible. They are increasingly distressed by the lack of consistent direction coming from Washington. . . . So they are calling time-outs and heading for the sidelines while they wait for the referees to settle the rules of the game.' " a. Con argues that increased taxes and health care costs are spread over ten years. Insurance premiums are already increasing dramatically to pay for the coverage of children under 26 under parents policies and the onerous new reporting of purchases has hit. Small taxes like the tax on the tanning salons has hit. CBO predicts that health care premiums will continue to rise, and the cut n Medicare is well-publicized. Fears are legitimate, and that it will b years to discover just how bad it will get makes the situation worse. Con says that avoid bankruptcies due to health care costs will help the economy. It may help individuals, but the medical costs involved in the bankruptcies will not decrease; they will increase due to increased demand on the system. In the past, the medical costs unpaid were spread as hospital overhead among those paying insurance premiums; in the future they will be directly charged. For some businesses, the 1099 requirement is expected to more than triple their bookkeeping costs. Virtually every small business organization believes it will have a serious impact. http://tinyurl.com... Con says that it will simplify the process of deciding which 1099s have to be issued. Sure, and if tax laws required a person to send every dime earned to the government, that would vastly simplify the system. However, as with the 1099s, the simplification does not come close to offsetting the costs. b. Con seems to agree that affirmative action requirements are generally burdensome, but argues that businesses are used to them. Some businesses are used to some policies, but the financial industry is not used to the new laws. The large Wall Street firms tend to like complex new regulations, because they are confident they can play the system to their advantage by coping with the new burdens as small competitors succumb. c. Con says that he won't talk about cap and trade because it hasn't actually been passed into law. My point is that fear is paralyzing business. Promises to put coal companies out of business and to raise energy costs add to the fears that deter business from investing. The correct policy would have been for Obama to renounce cap and trade and promise to veto it if it passed. The drilling moratorium put 23,000 people out of work directly, but drilling is key to the local economy, causing many secondary job losses. http://tinyurl.com... d. There are substantial worries over both cap-and-trade and card check. http://tinyurl.com... "Businesses are worried that unionization via card check would lead to the abandonment of the secret ballot system - which traditionally allows companies time to make the case against unionization. ... Unsurprisingly, business advocacy groups oppose it - the National Federation of Independent Businesses, the American Small Business League and the Small Business Association of Michigan are on the record against card check." http://tinyurl.com... 4. If it were true that increased costs could always be passed on to consumers, then no business would ever fail. Costs may not be passed along if consumers do not want the product at the higher price, if larger competitors are better able to cope with regulatory burdens, or if overseas suppliers provide cheaper products or services. Business will invest during a recession if they see a return to prosperity ahead. They make investments in new equipment to lower costs and they invest in new opportunities to expand exports. Consumers won't start buying until they see good times ahead. Obama has botched the recovery by adopting policies that caused businesses and consumers to lose hope.