How To Improve The Us Economy - A Political Perspective

The United States has been in a recession since December, 2007, as defined by the National Bureau of Economic Research, a private, nonprofit research organization. But the American people, and the Obama administration along with the democrat majority congress, seem to be at odds on how to fix the American economy.

A robust economy means companies expand which results in job creation. Currently, the American people are not spending because many are not working, and those who are working are spending less, most likely due to the possibility of losing their job. Current unemployment rate stands at 9.6% as of August, 2009. A decrease in spending by the American people results in a decrease in company profits, company non expansion, and more layoffs.

Reporting on a survey by Watson Wyatt, a consulting firm, the HRSpecialist.com reported in November of 2008 that one-fourth of U.S. employers plan to have staff reductions during the following calendar year. We are now seeing this come to fruition for 2009.

So how can the US economy improve? Improvement being defined as two consecutive quarters where we do not have negative growth in the GDP (gross domestic product). The following is what we call the Steps to Economic Improvement. These are steps for consideration which hopefully result in a healthy bipartisan discussion between our elected congressman and their constituency. These steps may result in non-recessionary growth of our economy.

You may or may not agree with these steps, but at a bare minimum, these are points to consider, and ideally result in a healthy discussion with our elected congressmen, which at last check, is one of the unchanged notions of a free democratic society.

Steps to Economic Improvement:

1) The first step is to realize that it is business and not government that creates jobs and wealth within the American society. This is where we believe is the heart of the problem. It is evident that the Obama administration believes it is government that will lead Americans to economic prosperity. This is why the federal government has put forth a $780 billion stimulus package. So where is this money really going. Let's take a look at the breakdown. (source Republican Senate office, CNN.com AC360)

$780 Billion Stimulus Package:

MORE THAN $43 BILLION IN TRANSPORTATION INFRASTRUCTURE INVESTMENTS

$27 BILLION FOR HIGHWAY, ROAD AND BRIDGE INVESTMENTS

$8.4 BILLION FOR PUBLIC TRANSIT INVESTMENT

$2 BILLION FOR HIGH SPEED RAIL

$1.3 BILLION FOR FAA AIRPORT IMPROVEMENT FACILITIES AND EQUIPMENT

$850 MILLION FOR AMTRAK

$250 MILLION FOR GRANTS TO STATES FOR INVESTMENT IN HIGH SPEED AND INNER CITY PASSENGER RAIL

$100 MILLION TO MARITIME ADMINISTRATION FOR ASSISTANCE TO SMALL SHIPYARDS

$76.8 BILLION IN EDUCATION INVESTMENTS

$39 BILLION FOR STATE FISCAL RELIEF TARGETED DIRECTLY FOR EDUCATION

$13.9 BILLION FOR PELL GRANTS

$13.5 BILLION FOR SPECIAL EDUCATION FUNDING

$10.4 BILLION FOR TITLE I

$6.4 BILLION FOR WATER AND SEWER INFRASTRUCTURE

$3 BILLION FOR JOB TRAINING

$3.25 BILLION FOR WORKFORCE INVESTMENT PROGRAMS

$160 MILLION FOR JOB CORPS

$87 BILLION IN TEMPORARY AND TARGETED MEDICAID RELIEF TO STATES

$5 BILLION FOR SUPPLEMENTAL GRANTS TO PUBLIC HOUSING AUTHORITIES FOR CAPITAL NEEDS

$4.7 BILLION FOR STATE AND LOCAL ENERGY EFFICIENCY BLOCK GRANTS

$4.4 BILLION FOR SMART GRID

$2.9 BILLION FOR WEATHERIZATION PROGRAMS

$2 BILLION FOR ADVANCED BATTERY MANUFACTURING

$7 BILLION FOR LOAN GUARANTEES FOR STANDARD RENEWABLES

$800 MILLION FOR CONSTRUCTION OF PORTS OF ENTRY

$500 MILLION FOR FIREFIGHTERS ASSISTANCE GRANTS

$1.2 BILLION FOR NATIONAL SCIENCE FOUNDATION

As part of the 2010 budget proposal, the Obama administration has also proposed additional measures to attempt to stabilize the economy, including a $2“3 trillion measure aimed at stabilizing the financial system and freeing up credit. In a nutshell, auditors from the Congressional Budget Office have said that Obama's budget would produce $9.3 trillion in deficits over the next decade.

This is a large chunk of change that needs to be provided by the American taxpayer! But the question is, will all of this spending help the long term growth of the US economy? Growth being during the period of not just the next few years, but rather 10 to 15 years. We believe it will not and here is why.

2) These programs burden the tax payer. History has shown that long sustained economic growth can not take place when the tax payer is over burdened by a federal deficit. Also, when the government spends money they do not have, they print more money, which results in a devaluation of the US dollar. This results in inflation.

3) Small businesses employ just over half of U.S. workers. How do you define a small business. The Office of Advocacy defines a small business for research purposes as an independent business having fewer than 500 employees. In examining the $780 billion stimulus package, you can see that there is no real help for small business. Remember, job creation is needed for economic recovery.

4) The socializing of America will not result in long term economic growth. The massive spending that the Obama administration has proposed will result in an even greater tax burden to the American people.

Most Americans believe in the frame work and meaning of The Constitution of the United States. The first words of the Constitution "We the People" make it clear that our government was established to serve the people. The essence of a democracy was eloquently stated by President Lincoln in his Gettysburg Address "that government of the people, by the people, for the people, shall not perish from the earth." This simply means that our elected president and congress have a responsibility to listen to the American people.

And it can be said that most Americans do not want a socialistic society for the United States. Government needs to stop spending the American tax dollar, simply because an escalating government deficit will not result in an overall improvement in our economy.

5) Programs such as Cash for Clunkers, auto industry bailouts, and the like, only in the end increase the tax burden on the American people. These massively expensive programs do very little to improve the viability and strength of most small business. Based on 2008 figures, there are 155 million workers in the United States. The car industry accounts for about 13 million of these workers. Therefore, most Americans will not benefit from the bailout of the auto industry. There is only a marginal at best improvement in the economy from such programs.