In reading through the American Jobs Act there are a few things that jump out at me. To start, how similar the whole bill sounds to what we've been doing for the past three years. And in contrast, how the bill lacks anything with a real long-term focus or understanding of what really is the problem with the economy.
Beyond those general thoughts, here are a few snapshots of analysis:
$50 billion for "immediate investments" in surface infrastructure: Seriously? The first $48 billion spent on infrastructure wasn't enough? Sure, there are plenty of pot holes to fill and bridges to fix, but why should we ignore the past three years of slow work on infrastructure and just believe that now this kind of spending can turn around the economy? The attempts to build high-speed rail have run into a little problem we at Reason like to call realistic analysis. Even the president has noted that the projects weren't really shovel ready. And how many jobs were destroyed by all the congestion and delays created by the ARRA work projects that just temporarily hired some construction workers who are now out of a job again?
$35 billion for teachers and firefighters and cops aka "the state bailout fund": This is a classic government deception. The states are struggling (as they have been for a while). This year we've seen government shutdowns and bitter fights over how to fund budgets. So essentially, this program is an aid package to the states. It will be pitched as funds for teachers and public safety expenditures in state budgets. But this money helping on those line-items means the states don't have to fund those line-items out of their general funds. So really, it is just a blanket aid check to the states. If you only had money to purchase either a television or a couch, and someone came to you and said "here is money for a couch" you would take that cash, buy the couch with it, and then use your money for the TV. If they said, "here is money for a TV" it would be the same scenario. They might as well, just give you money. And by the way, states already got a $102 billion aid package through the stimulus—why do federal taxpayers have to keep bailing them out?
$15 billion for a program to pay construction workers to refurbish vacant and foreclosed homes: Okay, let me see if I am tracking this correctly... government subsidies fueled the building of too many homes during the last decade and pushed people into homeownership before they were ready. And we had a bubble. This meant there were too many construction workers and those guys are now out of a job with the bubble crashing. Now we are going to pay those guys, who never would have been construction workers in the first place without all the demand for housing, to fix the abandoned homes that they built but which we don't need and that people weren't ready for. FUBAR.
Order the SEC to review securities regulations to reduce the burden on small businesses: I have an idea, how about we get rid of all regulations that hurt any businesses! But that aside, how is this any different from Obama's Executive Order earlier this year which required all agencies to ensure that their rules: "protect public health, welfare, safety, and our environment while promoting economic growth, innovation, competitiveness, and job creation." What he should have done is say, "Well, Sarbanes-Oxley didn't really do a whole lotta good, so since I said I'd be a change from Bush, let's repeal that Bush-era burden on business once and for all."
$10 billion to seed an infrastructure bank: I'll let Reason's Bob Poole and Sam Staley cover this one, see the following:
- Sam Staley testifying in the House on a national infrastructure bank
- Bob Poole on the value and problems with a national infrastructure bank
A federal refinance program for homeowners: This initiative will almost certainly exclude any problematic homeonwers, so all it will do is really reduce the payments of homeonwers who are currently paying their mortgages. And the cost of broken contracts, reduced earnings for investors, and even taxpayer losses from Fannie and Freddie would not be worth it.
I'll break down the whole of the Jobs Act on Friday on this blog. For now, here is a rhetorical spin job summary of the American Jobs Act from the White House.