Obama hasn't been sworn into office yet and he's basically laid an egg on his economic stimulus plan. That said, opinions are like
censored and let's look at some analysis.
Firstly we have Christina Romer & Jared Bernstein analysis.
Frankly, I find this this report odious simply going off of the principle that a 1% increase in GDP equates to 1 million jobs. Well, that's all great if the U.S. were an isolated economy, but it's not and today's GDP does not equate directly to U.S. domestic job growth, as a 1:1 correlation. Rebate checks end up buying goods from other nations. Tax cuts not dealing with global labor arbitrage and offshore outsourcing won't create jobs.
Paul Krugman is much more polite on their analysis but also implies the stimulus is much too weak.
Here is a CBO chart overviewing the past stimulus proposals and their effectiveness. Oh how wrong they were! Claiming a lump sum rebate would have a large effect obviously had little effect on stimulating the economy. One thing to note is they claim tax cuts, from individuals to corporations has little effect.
Just for further credibility purposes, obviously take the CBO with a grain of salt for in their manufacturing analysis they do not even mention biased and bad trade agreements or global labor arbitrage as a major cause in the decline of U.S. manufacturing. Discounting bad trade policy, offshore outsourcing, or use of guest worker Visas in the United States domestic labor markets is an obvious calculation buster for accurate analysis.
In terms of taxes, Tax Policy Center, Not Much Bang for the Buck really calls it on more tax cuts:
The research on the last three rebates suggests that people spent between one-third and one-half of the money within nine months of the time it got into their pockets. If Obama pumped $150 billion into these tax cuts and 40 percent, or $60 billion, got spent, the impact on the U.S.’s $14 trillion economy would be real, though modest.
Bonus depreciation in its many incarnations has been tried a half-dozen times over the past four decades and its benefits are, shall we say, hard to find. It won't help companies with losses (most of them, these days), or non-profits. A year ago, while both were at The Brookings Institution and TPC, Obama advisor Jason Furman and CBO director-designate Doug Elmendorf wrote of the 2001-2003 versions, “bonus depreciation for business investment did not seem to be very effective in spurring economic activity.”
Even Congressional Democrats critized this plan but note what is missing from the dialog, offshore outsourcing, trade and guest worker Visas.
Fortunately one voice was more clear. Former Democrat Senator Fritz Hollings wrote a piece connecting offshore outsourcing, trade to our current economic crisis:
We suffer not from a lack of confidence in the economy, but from a lack of confidence in a government that continues to cut taxes, borrow and spend, increases the debt and waste of interest cost, offshores the nation's production and jobs, refuses to protect our standard of living and refuses to engage in the trade war or globalization. Instead of calling for sacrifice, President-elect Obama calls for the same old, same old -- no change.
Hollings is also calling for a VAT tax scheme to create a more balanced trade policy for the United States.
Economist Pat Choate also is making no bones on what kind of policy change is really needed:
Simply put, the U.S. cannot kick start its economy while it has to finance the purchase of more than $700 billion of imports annually than it exports. We do not have the savings, and our credit is short. What Obama and his advisors fail to grasp is that by ignoring the trade deficit, they risk turning a deep recession into a long, deep Depression.
If they want to create jobs then an obvious answer is to cancel all Federal and State offshore outsourcing contracts and hire U.S. citizens, working in the United States. It makes no sense to funnel even more U.S. taxpayer funds overseas while claiming one is trying to create jobs in the United States.
Congressional Representative Rosa DeLauro gives state offshore outsourced contract estimates from 2 years ago, which assuredly have more than doubled since this time:
Last year, state governments across the country spent $3.8 billion of taxpayer funds on offshore outsourced work—an amount expected to double this year. With reports that approximately 3.3 million jobs and $136 billion per year in wages are expected to move abroad over the next 15 years, the need to address the problem is urgent. Taxpayer money should be used to create jobs right here at home, not to send them overseas. The privatization of federal work, federal procurement of goods and services, and state government procurement using federal funds should not take work done in the United States offshore; and state governments should not be eligible to receive federal funds unless they certify each year that such funds will not be spent offshore. That is why I have reintroduced "The United States Worker Protection Act," which would prohibit taxpayer dollars from being used to outsource or take offshore work presently done in the United States.
United Professionals has posted charts and is almost screaming that job creation requires balanced trade policy.
While the funding of infastructure jobs will have a direct efect (see Romer, Bernstein, pp. 7-8), if they do not ensure those jobs are going to U.S. citizens, in the United States, as their top priority, well, how can they guarantee job growth for our nations members?
Bottom line the Obama economic team is simply ignoring the devastating effects of globalization, global labor arbitrage, wage arbitrage, worker displacement, bad trade agreements and the corporate controlled migration of workers, illegal workers for the purposes of labor arbitrage which have eroded the middle class, working America throughout the United States and brought us to this point.