Over the coming weeks, I’m going to be putting out more proposals, week by week, that will help businesses hire and put people back to work. And I’m going to keep at it until every single American who wants a job can find one.
It's anyone's guess if President Obama was taking a page from Dave's playbook, hoping that the magic of Hollywood or the power of a populist message would resonate with Americans, helping to turn around his plummeting poll numbers. But a few things were clear in the President's speech: Despite all evidence to the contrary, he is still clinging to the notion that the federal government can create jobs, he remains utterly disconnected from the reality that the American people are fundamentally dissatisfied with the direction he is taking the country, and he is doggedly sticking to his favorite script—the story of more federal spending coming to America's rescue.
Since the beginning of his presidency, Barack Obama has promised that he would spend America out of the recession using the power of the purse, infusing the U.S. economy with stimulus spending in order to save or create millions of jobs. He failed. Despite a $787 billion stimulus package, the unemployment rate is 9.1 percent, job creation is anemic, and as Heritage's James Sherk and Rea Hederman, Jr., explain in a new paper, the average duration of unemployment hit a new record last month, surpassing 40 weeks for the first time ever.
Yet the President is falling back on more stimulus spending as a solution. In his speech yesterday, Obama told his audience to contact their representatives (again) and demand more spending on infrastructure. And he called for Congress to set aside their divisions so more money can be spent in the Department of Energy to further his green agenda. If you think this is all a re-run, that's because it is. And we know how the story ends. That's because an undeniable truth emerges from the President's stimulus fiction: Government spending does not stimulate economic growth. Heritage's Nicolas Loris explains why:
Sure, the government can create jobs. They can use our taxpayer dollars to hire workers to dig holes and fill them back up. But if there’s no net gain in productivity and wealth, the job is a waste.
For instance, we could replace all of the world’s mechanized agriculture equipment with hoe wielding farmers, and that would create jobs. But it would also significantly reduce productivity and efficiency. The economic reasoning for switching from more efficient machinery to less efficient human capital is such a baseless plan any politician suggesting it would be laughed out of office.
The failure of government stimulus spending has played itself out time and time again. In the New Deal, Japan in the 1990s, President George W. Bush in 2001 and 2008, and the Obama stimulus last year all failed to generate the hoped-for stimulus.
Yet the President keeps telling his story, and he keeps taking credit for the supposed success of his economic stimulus. But the American people aren't buying it. As the stock market surges and plummets, Americans' confidence in the economy keeps sinking—hitting lows not seen since March 2009 during the recession, according to a new Gallup poll. They're looking for a new direction—one of fiscal restraint and smaller government that they voted for last November.
It's time to stop re-running the same big-government storyline and put America on a new road of fiscal discipline headed toward economic growth. Congress and the President can start by balancing the budget, lowering spending, and reforming entitlements as laid out in Heritage's "Saving the American Dream" plan. Yesterday, President Obama said, "We can’t afford to play games—not right now, not when the stakes are so high for our economy." He's right. But unfortunately, he isn't proposing the ideas needed to put American back to work.