Jon Hendry of the New Mexico Federation of Labor recently defended the Obama “Jobs” bill in the Albuquerque Journal. His rhetoric repeated several supposed justifications for more federal spending that don’t hold up under closer scrutiny:
Claim 1: Obama’s “Jobs Bill” will rebuild our infrastructure. Of course, that was the justification for the original $800 billion “stimulus.” How much of it was used on infrastructure? Not much as the chart below illustrates. Essentials like infrastructure are often used to sell more spending and waste. And, not all infrastructure is created equal:
Claim 2: We need to “revive manufacturing”: the fact is that US manufacturing is producing more economic value than ever. Sure, we could do even better, but protectionism is not the answer. Ironically, the recently-passed free trade agreements could indeed be a major boon for US manufacturing.
Claim 3: We must provide the funds to end state and local government layoffs that cut essential public services: I’m not sure what “essential” services have been cut and who the “we” is. At least in New Mexico, I can’t point to any major layoffs by governments.
Claim 4: Our elected leaders should extend unemployment benefits and work much harder to keep homeowners in their homes: Extending unemployment benefits will lead to people staying unemployed for longer periods of time. People need to stay in the work force to keep their skills sharp though there are some specific, free market ideas for making the jobs market better. In terms of working to keep homeowners in their homes, this is a reasonable idea depending on the specifics.
Rather than raising taxes on some in order to foist another “stimulus” on the American economy, Obama and Congress need to cut spending and regulations to put the economy back on a firm footing. The signing of these trade agreements is the best thing to happen to the US economy since Obama became President. Hopefully he builds on that.