Will Obama's Plan for Jobs work?

I still do not have all the details of the new plan Obama proposed yesterday, but enough have leaked out to allow a rudimentary commentary on what the president has proposed.

Some portions of the plan will not work to create jobs. Perhaps the biggest failure in the plan is the move to send money to pay for teachers' salaries. I do not know how much Obama wants to spend on this, but consider these two facts: 1)It is the middle of September and the school year is underway everywhere across the country. That means classes have already been structured and teaching positions determined. 2)The next time that changes to class structures could easily be made is next September, a year from now. In other words, for all the supposed urgency about creating jobs NOW in the speech, the president is just trying to send money to his favorite supporters once again to protect them in the future.

Another big failure in the speech is the infrastructure work. Creating an infrastructure bank in Washington will take time. It will add another layer of red tape to the construction process. Indeed, the transportation funds that were directed to shovel ready jobs in the first stimulus bill are still one-third unspent because of the delays inherent in the approval process. A bump in funds for infrastructure might help job creation in 2013 or later, but there will be no help now. There will, however, be major expenses as Washington spends and spends to gear up for this plan.

The specifics of the plan to repair and upgrade schools is also problematic as it pertains to jobs. First, we have heard nothing with regard to who picks the schools to repair. This alone will take months and years to decide. Of course, if the funds are directed to be spent on a per capita basis, then billions will be spent to do repairs which many districts would have just done on their own. The spending will not create jobs, it will only change who pays for them.

The cut in the payroll tax is another area that is problematical. This will undoubtedly pump additional funds into the economy and should help economic activity. But it cannot be looked at in a vacuum. This cut will remove something not too far less than half of all of the current funding that goes into the Social Security system. We all know that Social Security is already paying out more than it takes in. Obama will change a trickly of an outflow into a raging torrent. There will need to be a very clear explanation as to how, if at all, Obama proposes to avoid bankrupting the system.