Subscribe free to our newsletters via your
. Military Space News .




POLITICAL ECONOMY
Outside View: Obama jobs campaign: Politics as usual
by Peter Morici
College Park, Md. (UPI) Jul 26, 2013


disclaimer: image is for illustration purposes only

U.S. President Barack Obama is on the campaign trail to sell his economic program directly to voters -- over the head of a reluctant U.S. Congress. He says it's all about jobs but it's just politics as usual.

The economic recovery has been painfully slow. Through last fall, growth was only 2.1 percent and has since slowed to about half that pace.

Concerned about the durability of the expansion and pending Obamacare mandate to fund health insurance for full-time employees, businesses are replacing full-time workers with part-timers. Since January, 833,000 additional Americans have reported working part-time, while 97,000 fewer say they have full-time positions.

The president wants more infrastructure spending, publically funded pre-kindergarten education and a higher minimum wage. However, those won't substantially change the unemployment picture.

Improvements to roads and other public facilities are sorely needed but too many federal dollars are spent on materials from China, which often excludes U.S. products from its projects.

The United States would be within its World Trade Organization rights to keep more of that money at home but Obama refuses.

Whatever the benefits, funding pre-K with higher taxes only steals jobs from other industries or requires more borrowing. And no one ever created a job by raising the cost of hiring workers.

Inadequate demand for what Americans make remains the primary drag on growth. Consumers are spending again and housing prices are recovering but, since the recovery began, imports and the trade deficit have zoomed.

China, Japan and Germany -- the three largest economies after the United States -- pursue cheap currencies and other protectionist strategies to amass trade surpluses with the United States and prop up employment at the expense of American workers.

Along with imported oil, the $540 billion trade gap costs Americans about 8 million jobs -- enough jobs to drive unemployment down to 5 percent.

Economists across the political spectrum have offered approaches for addressing mercantilism but Obama remains dismissive.

Lifting restrictions on petroleum development off shore and in Alaska, more intense use of natural gas in freight transportation and accelerating the adoption of hybrids and more fuel-efficient internal combustion vehicles would erase dependence on imported oil.

The president has another agenda.

Along with immigration reform, championing spending for infrastructure, pre-K and a higher minimum wage shores up support for Democrats among Hispanics, women and unions for the 2014 elections.

However, all would require more government borrowing. For example, every time the minimum wage goes up, fewer people work and pay taxes.

Our federal system permits states to experiment with new approaches and it seems the president is embracing strategies -- government borrowing to win elections -- that made the finances of California and Illinois so fragile and put Detroit -- once the country's fourth largest city -- into bankruptcy.

If growth continues at 1, 2 or even 3 percent, then the weight of the baby boom retiring on federal entitlements will push federal deficits through the ceiling in the next decade.

Higher taxes won't help much. If tax rates are too high, successful people work less and take their skills elsewhere. Technology companies and financial institutions -- where the real fortunes are made these days -- can park their patents and profits in Ireland or some other low-tax jurisdiction.

Sooner or later, Washington won't be able to continue borrowing. Just as unions and banks will now tussle over whether pensioners or bondholders should have first claim on Detroit's remaining revenues, Washington can dicker with Beijing over whether the social security checks should go out or the Middle Kingdom gets all the interest due on its holdings of U.S. bonds.

At that point, we can auction off the Grand Canyon and spend the Fourth of July remembering what a great civilization we spent away.

(Peter Morici is a professor at the Smith School of Business, University of Maryland School, and a widely published columnist. Follow him on Twitter: @pmorici1.)

(United Press International's "Outside View" commentaries are written by outside contributors who specialize in a variety of important issues. The views expressed do not necessarily reflect those of United Press International. In the interests of creating an open forum, original submissions are invited.)

.


Related Links
The Economy






Comment on this article via your Facebook, Yahoo, AOL, Hotmail login.

Share this article via these popular social media networks
del.icio.usdel.icio.us DiggDigg RedditReddit GoogleGoogle








POLITICAL ECONOMY
China orders firms to cut capacity as economy slows
Shanghai (AFP) July 26, 2013
China has ordered companies in 19 sectors including cement and steel to slash production capacity as growth in the world's second largest economy slows. Beijing's industry ministry ordered around 1,300 firms to shut down outdated facilities by September and eliminate excess capacity by year-end, state media said Friday. In China's partly state-directed economy, companies often fail to h ... read more


POLITICAL ECONOMY
Rafael gears up for Israel's new defense era

Early hardware delivery enables deployment of crucial missile defense radar

Israel deploys Iron Dome near Red Sea resort of Eilat

Missile plan to go ahead despite test failure: US

POLITICAL ECONOMY
Raytheon demonstrates high-definition, two-color Third Generation FLIR System

Raytheon, Chemring Group plan live missile firing for next phase of CENTURION development

Panama says suspected missile material found on N. Korea ship

Lockheed Martin Completes Captive Carry Tests with LRASM

POLITICAL ECONOMY
First Upgraded MQ-8C Fire Scout Delivered to U.S. Navy

US drone strike kills two militants in Pakistan

Northrop Grumman, U.S. Navy Complete First Arrested Landing of a Tailless Unmanned Aircraft Aboard an Aircraft Carrier

US drone lands on carrier deck in historic flight

POLITICAL ECONOMY
New Military Communications Satellite Built By Lockheed Martin Launches

US Navy Poised to Launch Lockheed Martin-Built Secure Communications Satellite for Mobile Users

Northrop Grumman Moves New B-2 Satellite Communications Concept to the High Ground

Canada links up on secure U.S. military telecoms network

POLITICAL ECONOMY
Novel Hollow-Core Optical Fiber to Enable High-Power Military Sensors

US jets drop unarmed bombs on Australia's Great Barrier Reef

Northrop Grumman Awarded Contract for LITENING Targeting System Sustainment

Raytheon's advanced uncooled thermal technology preferred by international land forces

POLITICAL ECONOMY
Singapore, Brazil firms eye Latin American defense market

Canada issues RFP for vehicles; Oshkosh eyes contract

Iraq seeks FMS deals worth more than $1.9B

Rheinmetall, MAN announce military deal in Australia

POLITICAL ECONOMY
Japan's Abe vows to help Philippines amid China row

China rules out leaders' summit with Japan: state media

JFK's sole survivor named ambassador to Japan

China coastguard raises Japan island row temperature

POLITICAL ECONOMY
New NIST nanoscale indenter takes novel approach to measuring surface properties

Desktop printing at the nano level

New nanoscale imaging method finds application in plasmonics

York Nanocentre researchers image individual atoms in a living catalytic reaction




The content herein, unless otherwise known to be public domain, are Copyright 1995-2014 - Space Media Network. AFP, UPI and IANS news wire stories are copyright Agence France-Presse, United Press International and Indo-Asia News Service. ESA Portal Reports are copyright European Space Agency. All NASA sourced material is public domain. Additional copyrights may apply in whole or part to other bona fide parties. Advertising does not imply endorsement,agreement or approval of any opinions, statements or information provided by Space Media Network on any Web page published or hosted by Space Media Network. Privacy Statement