Barack Obama
President Barack Obama speaks at the American Legion Annual Conference Tuesday at the Minneapolis Convention Center in Minneapolis. The President is preparing to give Congress an overview of his jobs plan. (AP Photo/Carolyn Kaster) 


What the President should propose for a jobs bill By Peter LaChance Calkins Media, Inc. | 0 comments

In the last stimulus program, a lot of money went to states for job creation, and the states used it to reduce their budget deficits and save or increase public sector jobs, such as teachers, police, firemen and bureaucrats - jobs that may otherwise have been cut, and which have since experienced cuts.

The last federal stimulus program clearly demonstrated that the President and the majority of citizens have opposing views about "job creation." Obama believes in investing in government jobs at federal, state and local levels, while most voters would rather invest in private sector jobs that produce our GNP.

Providing artificial incentives for government to hire public sector workers is counterproductive to the goal of reduced spending, reducing our federal deficit, and increasing employment.

These days (how did this happen?) government workers get paid more than private sector workers, their benefits are far more expensive, and they contribute very little toward them. On average, every public sector job saved or created costs the equivalent of almost two private sector jobs.

Former Department of Labor Secretary Robert B. Reich has a plan he wants Obama to implement that entails (guess what?) income redistribution and wasteful spending. He even proposes to bring back FDR's WPA (Work Projects Administration) and CCC (Civilian Conservation Corps), to make unemployed citizens direct employees of the federal government. They would work on bridges, roads and other infrastructure projects.

These programs are hugely inefficient compared to the private sector, and they would cannibalize existing private sector jobs. What many people today forget (or didn't learn in school), is that WWII is what led America out of the Great Depression, not these socialist programs.

President Obama will likely propose the creation of an infrastructure bank with the power to borrow hundreds of billions of dollars annually from the Treasury (thus further increasing the deficit) to help fund the repair and upgrade of roads, bridges, schools, rail lines, and you name it.

Wasn't infrastructure the focus of the last stimulus? How did that work out for taxpayers? Building infrastructure will spur the economy, but if it is implemented as it was during the last stimulus, funding the wrong projects will lead to a mountain of engineering and construction activity, after which careers will be cut short as construction demand goes back to normal levels.

I predict that the President's job creation plan will involve yet another stimulus program which will benefit the public sector more than the private sector. I think he will also use this occasion to propose making "investments" in "green" technologies and pre-college education. While these are noble purposes, investing in them is very expensive, with little to show for it in the next few years. We need to kick-start our economy now.

The Obama administration needs to leverage the fact that small businesses make up 50 percent of this nation's annual Gross Domestic Product (GDP) and employ 60 percent of the workforce. On top of this, small businesses create 2/3 of all net new jobs.

If I were the President, my jobs creation proposal would target a combination of small business growth and solutions that would also reduce our country's dependence on foreign oil. In so doing, we would create sustainable careers for citizens, increase tax revenue, lower our cost of energy, and greatly reduce the amount of imports we purchase from foreign sources; especially those factions who threaten the security of the U.S. and its allies.

Here is what I think our President should propose:

1. Roll back existing regulations that don't pass the risk-reward analyses that both Congress and the President have ordered, yet which the administration's departments have largely ignored. The number of new regulations is excessive and many of them cost too much to implement (compared to their intended benefits), interfering with small business growth, thus negatively impacting job creation.

2. Small businesses have lower overhead costs and can employ more people for the money. Make it economically favorable for large businesses in all industries to use small businesses as contractors as an option to growing their own workforce. Instead of creating an infrastructure bank to make loans (creating yet another bureaucracy), or forcing "small business set-aside" regulations onto large companies, we could accomplish this by immediately creating tax incentives for corporations (all forms, including S corporations) and individuals (sole proprietors). As small companies grow and gain experience, their ability to innovate and enter new markets quickly will spur the next technological wave.

3. Lift the moratoriums, bans and red tape that prevent additional oil drilling offshore (85 percent of our outer continental shelf is now off-limits to drillers) and in Section 1002 of the ANWR region of Alaska (2300 square miles, or less space than a square with 50-mile sides). Careers in this endeavor will be long and prosperous. Many critics say that such jobs won't be created in the near-term, however their concern is born out of the past two decades where our leaders have put a stranglehold on exploration and refining. Taking away uncertainty and roadblocks will result in a lot of new jobs as companies race to take advantage of new, sustainable opportunities.

4. Do likewise for natural gas drilling, which will also create sustainable new jobs in the short term. Nature has produced more natural gas than oil. The world's proven natural gas reserves will last 60 years at current levels, so this is a very sustainable strategy. The U.S. presently produces about 20 trillion cubic feet (tcf) annually. The U.S. presently imports over 3 trillion (net) of the 25 tcf/yr of natural gas that we consume, so we aren't far from becoming a net exporter. China produces only 3 tcf/yr, and it is poised to become a huge consumer of natural gas as it continues to modernize and experience rapid growth. If we made it easier for U.S. gas producers to double production, we could export as much as 17 tcf/yr, realizing additional annual revenues between $70 billion and $200 billion, potentially increasing our GDP by over 1 percent and cutting our trade balance by as much as 30 percent, while reducing our reliance on foreign sources of fossil fuel.

5. Natural gas burns safely, cleanly and efficiently. The next big U.S. infrastructure project should entail the use of tax strategies that will encourage the construction of more natural gas pipelines and natural gas filling stations, and the sale of vehicles that can be powered by both natural gas and gasoline (these already exist and they are much less expensive than electric vehicles to build, fuel and maintain). There are currently more than 30,000 natural gas vehicles on U.S. roads and over 700,000 worldwide, so we are already trailing many other countries on this opportunity.

6. Likewise, the federal government should encourage the use of natural gas to produce electricity, reducing our dependence on coal (more toxic emissions) while buying time to design and build a new generation of nuclear power plants and solve the problem of nuclear waste disposal.

These are just a few market-based ideas for creating sustainable jobs, which will spur our economy and bolster tax revenue, so that we can reduce our deficit and debt.

Buck