On the eve of Labor Day weekend, the U.S. Department of Labor released the latest job figures. The unemployment rate remains stubbornly around 10 percent–9.6 percent in August to be exact. Some new jobs are being created, but not at the rate needed to put new entrants into the labor force, existing unemployed back to work and to get the economy on track to recovery.
The duration of this sagging economy has taken its toll on Americans' confidence. According to a recent Rutgers University poll, three-quarters of Americans have either lost their job or have a close friend or family member who has. The poll also found that 86 percent of Americans who have jobs are worried about keeping those jobs. Another quarter believes the economy will not improve any time soon.
These worries persist despite the efforts taken by the federal government to stimulate the economy. Indeed, the Rutgers poll found that 39 percent of Americans believe the administrations stimulus proposals actually have prolonged the downturn, while 41 percent say they have not had a stimulative effect.
President Obama has once again gathered his economic team and pledged to propose additional measures aimed to get people aback to work. He will likely ask Congress to consider his ideas which have yet to be revealed, when it returns to Washington for a final month of business before the election.
Some have suggested targeted tax breaks for employers. Others propose another round of stimulus spending. Only in Washington can someone conclude that the problem with the first stimulus–all trillion dollars of it – is that is wasn't large enough and that the solution is to borrow and spend even more.
As Congress considers new measures to sputa the economy, I believe it should focus on the larger goal of getting the economy growing. No matter what targeted or short-term economic stimulus proposals the administration asks Congress to consider, the economy won't return to foul strength as long as federal spending maintains its unsustainable course and damaging tax increases loom.
In a recent edition of the Hoover Digest, Nobel prize-winning economist Gary Becker writes that "The only remedy for the long term (and other) unemployed is rapid economic growth."
As he notes, "Businesses are reluctant to take on many additional employees until they become more certain about their costs and the direction of the country."
One way to increase certainty is to extend current tax rates that are set to expire at the end of the year, thereby preventing a massive tax increase. another way is to defeat proposals that would impose new taxes, like the cap-and-trade bill passed by the House of Representatives last year.
As Dr. Becker writes, "I believe it would be great help if our leaders in Washington refrained from trying to radically transform parts of the economy while we are recovering, thereby magnifying the high degree of uncertainty typically caused by a serious recession."
So far, President Obama and the Democratic-led Congress have failed to heed that advice. If our economy is to truly turn around, they need to start doing so.
Sen Jon Kyl is the Senate Republican Whip and serves on the Senate Finance and Judiary committees. Visit his Web site at www.kyl.senate.gov or his YouTube channel at www.youtube.com/senjonkyl.