10 March 2010

An "Eisenhower Plan"

Ryan Avent:
[Small business] owners continued to report that their single-most important problem, by far, is low sales levels (rather than taxes, interest rates, or labour quality). That's worth keeping in mind as conservatives increase the volume at which they argue that high unemployment is due to extensions of government unemployment benefits. The problem is clearly not labour supply. Rather, the economy's principal job creators are seeing too little demand to justify increases in hiring.

...where in January slightly more owners expected conditions six months ahead to be better than they currently are, many more now say that conditions will be worse. Sales expectations, expansion plans, and perceptions of credit conditions also worsened.
It is obvious that the recently passed small business tax credits and the recently debated jobs bill will not be enough to dig us out of this downturn.

The President needs to push a second stimulus: An "Eisenhower Plan," allocating $50 billion for infrastructure (building and repairing highways, bridges, high-speed rail, etc.) that would create one million jobs within the year. Those jobs in turn would increase spending, which would help small business increase sales, which would lead to additional hires.

Of course, Republicans in the Senate will balk and try to filibuster; but I think the President could sway at least two of them, plus keep his own Democratic caucus in line, by proposing that small businesses with under 50 employees recieve a one year, 100% tax break that increases only marginally back to current tax rates over the next ten years.

Mr. President: You and your team have stopped the hemorrhaging, but we seem to be stuck at the moment. We are now at the point where we need to shake it up. Go all in, or these next three years will ruin your presidency. Mark my words.