Obama And The Dem's Worry About Jobs

Mr. Obama certainly should worry. His "stimulus package" is obviously a complete and utter failure. I predict that by next spring, unemployment will be above 12% and possibly as high as 14%. That in fact, the "stimulus package" has contributed to a much higher unemployment rate by robbing the private sector of funds by diverting huge amounts of money into government bonds, rather than being loaned to small businesses which would fuel new jobs. The "stimulus package" has in fact wasted money. In real terms, it costs roughly $350k per permanent job in the private sector, but the stimulus has cost roughly 5 times what it costs in private sector jobs. More over, those jobs created by the stimulus, are temporary because the funding will be terminated after a year or two.

The gloomy statistics are “a wake-up call,” according to Heidi Shierholz, an economist at the left-leaning Economic Policy Institute. “Unless Congress authorizes substantial additional spending for job creation, unemployment will remain elevated for years to come,” Shierholz said in a statement responding to the Labor report.

Senate Majority Leader Harry Reid (D-Nev.) on Tuesday announced to Senate Democrats that he will take up an initiative on jobs, though he did not offer specifics. Reid is facing a tough reelection battle himself; Nevada has been hard hit by the recession and housing crisis.

In the House, Democratic leaders have resisted suggestions for a second stimulus, but they are working on a variety of proposals they believe would create new jobs, including a program that provides small businesses with new loans.

So, Democrats in Congress have every right to worry. The only way to turn this bad economy around is to return the unspent stimulus funds. Drastically reduce taxes and spending. That is the way to encourage economic recovery. Unfortunately, this administration and Congress won't do any of those, instead they will increase spending and the resultant debt, which will strangle any economic growth that might result by siphoning ever more money from the private sector.

Next November I predict that the Democrats will lose at least 100 seats in the House and 16-18 in the Senate...that of course, is only if unemployment doesn't rise above 12%. If it goes higher, then losses will be much, much worse. On the other hand, I don't think the GOP will gain many of those seats. I predict that 3rd party candidates and independents will the be true winners.