President Barack Obama travels to Macomb Community College in Michigan today where he will unveil $12 billion in aid to the nation’s community colleges. According to Politico, the President’s message will be that “in a competitive global economy, the country’s economic viability depends upon the education and skills of its workers, who will increasingly need to have college experience.” True enough, but who exactly does the President believe will be hiring all of these workers?
The unemployment rate in Michigan is more than 14% and the state is projected to lose more than 310,000 jobs in 2009. A recent study by the Kaufman Foundation found that small businesses have led America out of its last seven recessions generating about two of every three new jobs during a recovery. Unfortunately the President’s top domestic priorities are set to cut off small business growth at the knees.
Health Care: Our nation desperately needs health care reform that lets Americans begin reducing exploding health care costs. The best way to do this is to reform the tax code to move away from employer sponsored health care and remove regulations that are preventing a true health insurance market from functioning. But the President does not want this change. He wants to build off the failed models of Medicare and Medicaid that got us into this mess in the first place. Worse, President Obama is set to fund his massive expansion of government run health care on the backs of small businesses. The Senate wants to pay for their health care plan with an employer mandate that will cost small businesses hundreds of billions of dollars a year and the House wants to pay for their health plan with a “surtax” on individuals with gross incomes above $280,000. Problem is, six of every ten who earn that much are small business owners, operators, and investors.
Cap and Trade: President Obama continues to try and sell his cap and trade plan as a job creation bill, but Michiganders know better. During a committee hearing on cap and trade this year, Rep. John Dingell (D-MI) explained: “Nobody in this country realizes that cap-and-trade is a tax — and it’s a great big one.” According to a Center for Data Analysis study, the economic costs of cap and trade by 2030 are: 1) reduced aggregate gross domestic product (GDP) of $7.4 trillion; 2) 844,000 jobs destroyed on average every year; and 3) a $1,500 raise in an average family’s annual energy costs.
Trillion Dollar Deficits: The U.S. Treasury announced yesterday that the government’s annual deficit reached almost $1.1 trillion by the end of June. Despite his promises to the contrary, President Obama’s spending plans will only make this problem worse. His budget would increase federal spending to a peacetime-record 24.5 percent of GDP by 2019 — not even counting the health care plan. Because tax revenues cannot keep up with this spending growth, the President’s budget would add $9.1 trillion in new debt over the next decade. It would double the national debt to 82 percent of GDP by 2019. Looking at these budget forecasts, investors are demanding higher interest rates to soak up the tremendous flows of debt coming out of the Treasury. This will mean higher interest rates for consumer loans, mortgage loans, business loans, etc.
At some point the President is going to have to realize that businesses, not the federal government, are the ones who will be rebuilding our economy.
Quick Hits:
- The White House will soon be forced to acknowledge that their economic forecasts for long-term growth are too optimistic when a new budget forecast will be unveiled next month.
- The U.S. retail industry’s largest trade group, the National Retail Federation, sent a letter to their 2,500 members asking them to take a stand against Wal-Mart’s endorsement of employer mandated health insurance.
- The current car czar, Steve Rattner, is stepping down and will be replaced by union strongman Ron Bloom.
- With six months left before a White House deadline, the Obama administration is unlikely to meet President Obama’s pledge to close the detention center at Guantánamo Bay, Cuba, by January.
- President Obama vowed yesterday to veto a pending $680 billion military spending bill for next year unless the Senate removed $1.75 billion set aside to buy seven additional F-22 fighter jets.
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