Living Within Our Means and Investing in the Future: The President’s Plan for Economic Growth and Deficit Reduction
Below I comment on on the first few pages (7-12) of the Presidents Plan for Economic Growth and Deficit Reduction . This is a dense document and my review is neither complete nor my analysis based on sharp political knowledge. As my blog indicates I focus on anecdotal evidence. What struck me, having never read such a dense piece of policy, is the transparency of bad and self-serving ideas. I do not mean for my own biases to negate otherwise good ideas that are also included.
There were a number of good ideas, bad ideas and self-serving ideas layered into the document with lazy political acumen. Below I offer some high-lights, low-lights and some “grow-lights” that seem engineered to increase votes into help Obama’s reelection campaign. My review starts in the American Jobs Act but stops short of the unemployment insurance section and before the discussion on Mandatory Savings, Health Savings and Tax Reform. Clearly this list will be expanded when I have more time. I hope to post a Part II in the next day or so.
High-lights – Potential solid policy ideas with opportunities to create longer-term sustainable growth/deficit reduction
Provide a payroll tax cut to businesses, with a focus on small employers: Engineered to adversely help America’s small businesses. Sadly the GOP will fight all the bad stuff, and ignore all the good stuff in an effort to stonewall into the campaign trail.
Help entrepreneurs and small businesses access capital and grow: One of the more interesting ideas engineered to stimulate entrepreneurship. Items include: accelerated government payments to small business contractors; establish a framework for “crowdfunding” programs in concert with the SEC to help small companies raise capital; increase in guarantees for bonds to help small firms compete for infrastructure projects (this one smells like special interest handouts like Solyndra, not so good). Whitehouse could probably raise substantial revenue by Trademarking “crowdfunding”.
Offer tax credits and career readiness efforts to boost veterans’ hiring: “Returning Heros Tax Credit of up to $4,800 for unemployed veterans, and a Wounded Warriors Tax Credit of up to $9,600 that will increase the existing tax credit for firms that hire unemployed veterans with service-connected disabilities.” I’m not sure of the message sent by quantifying the additional $4,800 on for wounded warriors, but the effort by the administration to help our amazing veterans is an excellent idea.
Improving our airports: While in one sense this might fall into the Low-light category due to the State Aid back door issue, this is a real area of need that can create meaningful efficiency improvements for commercial and passenger air traffic.
Funding for innovative transportation: I know this one is controversial primarily due to the call for high-speed rail. I have seen worse expensive ideas. The real issue is where we we are going to buy the technology from. I’d be happier picking a battle that could be levered at least in part to American manufacturing. Last I checked the Germans and Japanese have this market tied up. What about retrofitting our transportation sector for electric and natural gas vehicles? (neither were mentioned under this header) At least those dollars would go to Ford and GM.
Establish a National Infrastructure Bank: Another controversial idea. The devil will be in the details. However, leveraging tax payer money with private investment is generally a winning combination.
Expand nationwide wireless Internet services for the public and the first responders and reduce the deficit: This is progress you can build on. This is an excellent idea, and NEEDS to be advanced smartly. These types of investments enhance national productivity while paving the way for REDUCED government expenses. “The plan includes reallocating the D Block for public safety (costing $3 billion) and an additional $7 billion to support the deployment of this network and technological development to tailor the network to meet public safety requirements. This is part of a broader deficit-reducing wireless initiative that would free up public and private spectrum to enable the private sector to deploy highspeed wireless services to at least 98 percent of Americans, even those living in remote rural and farming communities.”
Grow-lights – Potential spam policy designed to provide short term stimulae to directly affect the 2012 election outcome.
Establish a complete payroll tax holiday for new jobs or wage increases: “CBO has identified this type of job creation tax cut as one of the most effective ways to help accelerate job growth.” Has the additional benefit of feeding the hope that POTUS gets reelected. Tax holiday’s do nothing for long term sustainable growth. They attempt to help politicians get reelected.
Extend 100 percent business expensing through 2012: “Extend 100 percent business expensing through 2012. “The President is proposing an extension of the 100-percent expensing provision that he signed into law in 2010, which rewards firms for making investments by allowing them to deduct the full value of those investments from their tax obligations through 2012” Anything applied to 2012 explicitly automatically must be red-flagged into the campaign finance bucket.
Investments in making our Nation’s highway systems safer and more efficient: This one reeks of the job creation crack pipe. A quick jolt, followed by a pronounced feeling of emptiness and wasted effort. Has anyone ever been on a highway that is not currently under construction? They are always under construction. Try I-95 any day of the week.
Repairing transit systems and improving our rail systems: Ironically this did not get labeled the Buffet Bill. Somehow I wonder.
Expediting high-impact infrastructure projects: Government should not expedite anything that costs lots of money. Unless of course there is a pending election. That would be like having a 12 year old rush out to buy a car.
Low-lights – Potential counterproductive ideas that either stifle growth/spending reduction or are so absurd as to assure better policy measures get stonewalled in partisan politics.
Prevent teacher layoffs and keep police officers and firefighters on the job: These are the hand outs that the GOP cannot afford to fight against. This is the “feel good” wasteful spending policy. I in no way want to imply that these aren’t areas of dire importance and need, but they way this is framed it reads as backdoor aid to States which the GOP would never approve. I firmly believe that we need to invest in teachers, police officers, fire fighters, American Flags and apple pie. That goes without saying. What I can’t stand is the lemonade stand run by kids living in a McMansion. Don’t patronize me to believe that dollars earmarked here will actually end up appropriated to the constituency being exploited to raise the funds. If this passage turns into a backdoor blank-checks to the states, we will NEVER see this idea fulfill its intent. It is noble in its spirit, but probably will fail in practice. When 50 states chime in, this one is poised to end up to be so messy its never gets done and certainly not in the spirit it intended. I’d be willing to bet that if this gets through a beleaguered Illinois may wind up with the best public schools in the country :)
Modernize at least 35,000 schools: ibid above.
Opportunities for all in the transportation sector: Always be suspect of any small numbers in a $4 trillion dollar plan. “The President’s plan will invest an additional $50 million in 2012 to enhance employment and job training opportunities that will benefit minorities, women, and socially and economically disadvantaged individuals in transportation-related activities, including construction, contract administration, inspection, and security. His plan will also invest an additional $10 million in 2012 to help minority-owned and disadvantaged business enterprises gain better access to transportation contracts.” Also be suspect of any language that says “for all”. This implies “for all voters”, and is so transparently engineered to buy votes in swing states. What we need to is have this $60 million included in the campaign finance budget, as this is really what this item will be used for.
Put people back to work rehabilitating homes, businesses, and communities: Not a fan of this one. “Many regions with concentrated home foreclosures also have concentrations of vacant commercial structures that weigh on property values and make it less likely that new businesses will come into the community and invest new capital.” On the plus side its an attempt to help depressed communities revitalize and proposes a public private partnership to do so. Conversely, many of these geographies were over leveraged and over developed. Beautifying defunct towns and sweeping empty streets wont do much without a natural job-base. If residential and commercial real estate are defunct, there is a good reason. We need to allow some ghost towns to become tourist traps. I don’t say this without real empathy for those who may still be living in these areas, and substantial regret for their situations. This kind of investment only rewards speculators. Spending precious tax dollars in unsustainable communities is not the best and highest use of our nearly depleted fiscal stimulus. For a fraction we could probably help remaining residents relocate to areas of the country where there are jobs, and help those communities enhance local infrastructure. We need to be wise, not smart in how we do this, and to leverage investments that can create innovation and productivity, not social assistance. This falls into the 2012 jobs for re-election bucket. It’s also a back door bailout of regional banks.
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The American Jobs Act Review (Part I)
September 19, 2011Living Within Our Means and Investing in the Future: The President’s Plan for Economic Growth and Deficit Reduction
Below I comment on on the first few pages (7-12) of the Presidents Plan for Economic Growth and Deficit Reduction . This is a dense document and my review is neither complete nor my analysis based on sharp political knowledge. As my blog indicates I focus on anecdotal evidence. What struck me, having never read such a dense piece of policy, is the transparency of bad and self-serving ideas. I do not mean for my own biases to negate otherwise good ideas that are also included.
There were a number of good ideas, bad ideas and self-serving ideas layered into the document with lazy political acumen. Below I offer some high-lights, low-lights and some “grow-lights” that seem engineered to increase votes into help Obama’s reelection campaign. My review starts in the American Jobs Act but stops short of the unemployment insurance section and before the discussion on Mandatory Savings, Health Savings and Tax Reform. Clearly this list will be expanded when I have more time. I hope to post a Part II in the next day or so.
High-lights – Potential solid policy ideas with opportunities to create longer-term sustainable growth/deficit reduction
Provide a payroll tax cut to businesses, with a focus on small employers: Engineered to adversely help America’s small businesses. Sadly the GOP will fight all the bad stuff, and ignore all the good stuff in an effort to stonewall into the campaign trail.
Help entrepreneurs and small businesses access capital and grow: One of the more interesting ideas engineered to stimulate entrepreneurship. Items include: accelerated government payments to small business contractors; establish a framework for “crowdfunding” programs in concert with the SEC to help small companies raise capital; increase in guarantees for bonds to help small firms compete for infrastructure projects (this one smells like special interest handouts like Solyndra, not so good). Whitehouse could probably raise substantial revenue by Trademarking “crowdfunding”.
Offer tax credits and career readiness efforts to boost veterans’ hiring: “Returning Heros Tax Credit of up to $4,800 for unemployed veterans, and a Wounded Warriors Tax Credit of up to $9,600 that will increase the existing tax credit for firms that hire unemployed veterans with service-connected disabilities.” I’m not sure of the message sent by quantifying the additional $4,800 on for wounded warriors, but the effort by the administration to help our amazing veterans is an excellent idea.
Improving our airports: While in one sense this might fall into the Low-light category due to the State Aid back door issue, this is a real area of need that can create meaningful efficiency improvements for commercial and passenger air traffic.
Funding for innovative transportation: I know this one is controversial primarily due to the call for high-speed rail. I have seen worse expensive ideas. The real issue is where we we are going to buy the technology from. I’d be happier picking a battle that could be levered at least in part to American manufacturing. Last I checked the Germans and Japanese have this market tied up. What about retrofitting our transportation sector for electric and natural gas vehicles? (neither were mentioned under this header) At least those dollars would go to Ford and GM.
Establish a National Infrastructure Bank: Another controversial idea. The devil will be in the details. However, leveraging tax payer money with private investment is generally a winning combination.
Expand nationwide wireless Internet services for the public and the first responders and reduce the deficit: This is progress you can build on. This is an excellent idea, and NEEDS to be advanced smartly. These types of investments enhance national productivity while paving the way for REDUCED government expenses. “The plan includes reallocating the D Block for public safety (costing $3 billion) and an additional $7 billion to support the deployment of this network and technological development to tailor the network to meet public safety requirements. This is part of a broader deficit-reducing wireless initiative that would free up public and private spectrum to enable the private sector to deploy highspeed wireless services to at least 98 percent of Americans, even those living in remote rural and farming communities.”
Grow-lights – Potential spam policy designed to provide short term stimulae to directly affect the 2012 election outcome.
Establish a complete payroll tax holiday for new jobs or wage increases: “CBO has identified this type of job creation tax cut as one of the most effective ways to help accelerate job growth.” Has the additional benefit of feeding the hope that POTUS gets reelected. Tax holiday’s do nothing for long term sustainable growth. They attempt to help politicians get reelected.
Extend 100 percent business expensing through 2012: “Extend 100 percent business expensing through 2012. “The President is proposing an extension of the 100-percent expensing provision that he signed into law in 2010, which rewards firms for making investments by allowing them to deduct the full value of those investments from their tax obligations through 2012” Anything applied to 2012 explicitly automatically must be red-flagged into the campaign finance bucket.
Investments in making our Nation’s highway systems safer and more efficient: This one reeks of the job creation crack pipe. A quick jolt, followed by a pronounced feeling of emptiness and wasted effort. Has anyone ever been on a highway that is not currently under construction? They are always under construction. Try I-95 any day of the week.
Repairing transit systems and improving our rail systems: Ironically this did not get labeled the Buffet Bill. Somehow I wonder.
Expediting high-impact infrastructure projects: Government should not expedite anything that costs lots of money. Unless of course there is a pending election. That would be like having a 12 year old rush out to buy a car.
Low-lights – Potential counterproductive ideas that either stifle growth/spending reduction or are so absurd as to assure better policy measures get stonewalled in partisan politics.
Prevent teacher layoffs and keep police officers and firefighters on the job: These are the hand outs that the GOP cannot afford to fight against. This is the “feel good” wasteful spending policy. I in no way want to imply that these aren’t areas of dire importance and need, but they way this is framed it reads as backdoor aid to States which the GOP would never approve. I firmly believe that we need to invest in teachers, police officers, fire fighters, American Flags and apple pie. That goes without saying. What I can’t stand is the lemonade stand run by kids living in a McMansion. Don’t patronize me to believe that dollars earmarked here will actually end up appropriated to the constituency being exploited to raise the funds. If this passage turns into a backdoor blank-checks to the states, we will NEVER see this idea fulfill its intent. It is noble in its spirit, but probably will fail in practice. When 50 states chime in, this one is poised to end up to be so messy its never gets done and certainly not in the spirit it intended. I’d be willing to bet that if this gets through a beleaguered Illinois may wind up with the best public schools in the country :)
Modernize at least 35,000 schools: ibid above.
Opportunities for all in the transportation sector: Always be suspect of any small numbers in a $4 trillion dollar plan. “The President’s plan will invest an additional $50 million in 2012 to enhance employment and job training opportunities that will benefit minorities, women, and socially and economically disadvantaged individuals in transportation-related activities, including construction, contract administration, inspection, and security. His plan will also invest an additional $10 million in 2012 to help minority-owned and disadvantaged business enterprises gain better access to transportation contracts.” Also be suspect of any language that says “for all”. This implies “for all voters”, and is so transparently engineered to buy votes in swing states. What we need to is have this $60 million included in the campaign finance budget, as this is really what this item will be used for.
Put people back to work rehabilitating homes, businesses, and communities: Not a fan of this one. “Many regions with concentrated home foreclosures also have concentrations of vacant commercial structures that weigh on property values and make it less likely that new businesses will come into the community and invest new capital.” On the plus side its an attempt to help depressed communities revitalize and proposes a public private partnership to do so. Conversely, many of these geographies were over leveraged and over developed. Beautifying defunct towns and sweeping empty streets wont do much without a natural job-base. If residential and commercial real estate are defunct, there is a good reason. We need to allow some ghost towns to become tourist traps. I don’t say this without real empathy for those who may still be living in these areas, and substantial regret for their situations. This kind of investment only rewards speculators. Spending precious tax dollars in unsustainable communities is not the best and highest use of our nearly depleted fiscal stimulus. For a fraction we could probably help remaining residents relocate to areas of the country where there are jobs, and help those communities enhance local infrastructure. We need to be wise, not smart in how we do this, and to leverage investments that can create innovation and productivity, not social assistance. This falls into the 2012 jobs for re-election bucket. It’s also a back door bailout of regional banks.