Five Months After Signing $787-Billion Stimulus, Obama Predicts Unemployment Will Continue Increasing for Months
July 14, 2009Five months after he signed an emergency $787-billion "stimulus" law designed to spur the economy and create jobs through deficit federal spending, President Obama said on Tuesday that he expects unemployment to continue to rise in the United States for several more months.
Obama predicted continuing, rising unemployment while speaking with reporters at the White House after meeting with the prime minister of the Netherlands. Obama was about to leave for an event in Warren, Michigan, preceding a trip to Tuesday evening’s Major League Baseball All-Star game.
Congress was in such a hurry to pass Obama’s $787-billion stimulus bill on February 13 that both the House and Senate voted on it less than 24 hours after the 1,071-page bill had been published on the House Appropriations Web site. Few members of Congress, if any, actually read the bill before voting on it.
One major item discovered in the bill after it was rushed through Congress was clearly not designed to create jobs in the near term. It was a mandate that health-care organizations work toward creating an Electronic Health Record for every American by 2014.
Yet, when a reporter asked Obama on Tuesday how high he expects unemployment to climb in states like Michigan, where it is already 14%, Obama predicted that the jobless rate would continue to climb for months to come.
“With respect to the employment issue, obviously I don't have a crystal ball,” Obama said.
“Now, this has been a more severe recession than we've seen since the Great Depression, so how employment numbers are going to respond is not yet clear,” he said. “My expectation is, is that we will probably continue to see unemployment tick up for several months. And the challenge for this administration is to make sure that even as we are stabilizing the financial system, we understand that the most important thing in the economy is, are people able to find good jobs that pay good wages.
“We had a problem even before this recession, even during periods of economic growth, where the pace of job growth, wage growth, income growth was not moving as quickly as overall economic growth. The last recession that we had, the recovery was termed a 'jobless recovery.' We can't repeat that approach."
Obama indicated that he continues to embrace the idea that "investment" by the government is the key to economic growth and job creation.
"And that's why when I talk about things like health care reform or revamping how we approach energy and investing deeply in clean energy, when I talk about improving our education system, as I'll discuss today when I go to Michigan, those foundations are so critical because we've got to find new models of economic growth, particularly at a time when consumers are just not going probably going to be spending as much as they were--and that has been driving a lot of the economic growth over the last several months,” said Obama.
Obama specifically suggested government should "invest" more in a number of different areas.
“And unless we are investing in energy, infrastructure, innovation, science, development, and eliminating the drag the health care system is placing on the overall economy," he said, "I think we will have a very difficult time generating the jobs that are necessary. If we make those investments, then I have confidence that we'll be able to do so.”
In order for the government to invest more money, Congress is now planning to take more money away from investors in the private sector.
As part of the health-care plan now under development in Congress, House Democrats announced last week they want to raise income taxes by $540 billion by placing what they call as “surtax” on the income tax rates paid by people and small businesses earning more than $280,000 per year. Obama was already planning to increase the two top income tax rates from 33% and 35% to 36% and 39.6%. That tax increase would hit individual earners and small businesses making over $200,000.
The income tax increase planned by House Democrats would be on top of the income tax increase planned by President Obama.
Americans for Tax Reform estimates that the income tax increases now planned by the White House and House Democrats would strike more than a million small businesses.