Politics of the first rule is not "when you're in a hole, don't dig, the more the better"?
Should someone remind Mr. President, since he also quickly dug a big hole.
In just 5 months, Obama has already launched a huge economic plan-3.5 trillion budget, 7,870 billion package of stimulus plan, 750 billion housing plan and used to take over us $ 1,000 United States automobile industry.
However there is no such as advocating that worked. Because of this, the sharp increase in the budget deficit, interest rates rise, oil prices are currently breaking through $ 71 per barrel, has reached a high point in 2009. Markets worry about the United States economy will face too much inflation, but not enough growth.
Obama may want, over time, everything is on track. But if he was wrong? if he only has a chance to change the way of economic policies, is also increasing in the hole before not to dig?
If this time the Obama decision and what to do?
Economic hole 1: Obama's budget
The White House's budget is a disaster. The initial budget submitted after less than three months, in 2009 and 2010 budget deficit was up $ 1,760 to 3.1 trillion. Summer deficit may increase again.
The bond market may not like this approach. Therefore, since the middle of March, 10-year Treasury yields rose by 50%.
Solution: in his speech, Mr. President, lamented the trillion deficit is one thing, but actually reduce the deficit is another. Of course, to achieve any real progress, he must be from social security and the federal health insurance. But why not take advantage of management and budget, OMB (Office of Management and Budget) summer adjustment budget, at least let Congress sign of reductions at the Federal Government spending? scholarship (Pell Grant) reduce 290 billion? why not reject 40 billion "cash for old vehicles" plan? such expenditure reductions at least let him get some credibility on the budget.
Economic hole 2: Obama's economic stimulus plan
If the stimulation plan $ 7,870 really smooth implementation of the Vice President Biden (Joe Biden) and Barack Obama recently why also announced to "speed up" the implementation of this plan?
The answer is self-evident. Stimulus plan does not give you the "stimulus" effect. Obama claimed that the stimulus plan has saved 15 000 jobs, this summer will then "rescuing" 60 million, but this is nonsense. The unemployment rate had just touched 9.4%. Obama in 2010 to create 400 000 new jobs promise not viable.
Solution: in the summer before, Obama announced stimulus plan should win, and then set the size by half to 4,000 billion. Now only $ 880 million. The ultimate reduction of the deficit will let Obama in China and other countries of the United States national debt purchase to obtain a certain degree of credibility. 8% of the 30-year mortgage rates the destruction of jobs in the construction industry than all housing, energy saving and bridge construction projects together and create jobs.
Economic hole 3: Obama's housing plan
Remember Obama February to launch the affordability of housing owners and stability plan (Homeowner Affordability and Stability Plan)? remember the will to 75 billion loan to change money for 3 million to 4 million homeowners from foreclosure? ultimately only 10 million homeowners to obtain a loan modification.
The result is a foreclosure numbers continue to rise. United States every 8.3 pen housing mortgage loan in an amount owed or foreclosure.
Countermeasures: loans change plan had not been welcomed, 300 000 to 400 000 target homeowners are not in the majority. Want to let people stay in the House? it again lower mortgage rates. Federal Housing Administration (FHA) to provide prepaid to tax us $ 8,000 's latest plans just past the irrational behavior and on the basis of a step forward. Give up.
Economic hole 4: to the rescue of General Motors
On General Motors (GM) and Chrysler (Chrysler) a receiver may be scheduled, but political intervention. To General Motors, General Finance (GMAC) and Chrysler injection 1,000 billion is one thing. (This is calculated on the United States Department of energy, alternative fuels loan number. ) Assumes that Washington will adopt a "non-interference" policy is another matter.
Countermeasures: the President cannot just saying that. He should take action. He cannot add Detroit Mayor Dave • Penn (Dave Bing) telephone, cannot let United States House of representatives financial services Committee Chairman Frank (Barney Frank) mercy General Motors with impunity. Why the President can't promise not to General Motors, general financial and Chrysler with taxpayers ' money? why not General Motors and Chrysler automotive supplier in the new requirements of 100 billion said "no"?
I know, I know that all these proposals on the Obama administration's true believer who are useless. They are convinced they are right.
But maybe in the next few weeks at a time, Obama in his counter-arguments advisers sit down and talk.
Maybe, just maybe, some individuals will bravely say, President, we are already in the hole, stop digging.
Keywords: Obama
United States economy
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