The State of the Union message presented an opportunity for the President to adjust to the political realities of last November’s election. With divided government, compromise is needed by both political parties to achieve the best interests of our country, rather than voting along straight party lines.
“Let us be clear,” as the President usually says, federal monies are needed to invest in public education, medical care and renewable energy. Does that sound like money from the private sector?
How can more public investments create jobs, when all that stimulus money pumped into the economy didn’t create any? Unless a favorable environment is created for businesses, unemployment will not decrease, especially for our younger people.
Job creation and reducing our massive debt need to be our top priorities right now. In his speech, the President did take a much more moderate tone, talking about freezing the growth of the domestic budget. But the investments will all be in the domestic side of the budget, so where are those dollars going to come from? Here are a few ideas about where investment is needed, and where cuts can be made. The President is right about the need to reform education in our country, if we want to remain competitive in international markets. Too few Americans have engineering or mathematical skills. Most of the students enrolled in our engineering and quantitative graduate programs today, are not American students, and many of these foreign students return to their own countries, after their studies are finished here.
We need our schools, at every level, to require heavy doses of math and science, and we need a roadmap for the time and effort both teachers and students will have to make, to learn new academic skills, with rigorous testing, in studies that lead to graduate degrees in science and engineering.
The question is what incentives can be offered and how many years will it take for our youths to reach graduate school levels in the future. To gain American technological leadership, we will have to increase our supply of scientists, engineers and researchers, but from where will they come? China, India and South Korea are producing the most students for research, development and industry growth, while our unemployment continues at 9.4 percent.
The government wants to increase federal investments in education to help develop American scientists. That means more debt and more spending costs to taxpayers. Political parties differ in their views about how to do this. The Democrats, the Republicans, and the Tea Parties, are all at odds with each other on where to target lower spending. All agree that government is too large; it must be shrunk. Fiscal responsibility is needed. Until now, specific plans with recommendations have not been given by any party.
The most obvious target for cutback is the new health care bill. Specific parts need to be eliminated, such as its 3.8 percent sales tax on the sale of your house or investment property, which will go into effect after 2012. If your house sells for $200,000, your tax bill will be $7,600 extra to pay for health care.
The new 1099 form on sales of $600 or more, adds a tremendous cost to business owners and the government, in time and in paper work. The president has said he will void the 1099 form.
Renewable energy investments in solar heat and powered wind mills show promise of big fuel savings. These industries will have great growth potential and a surge in new jobs. But like most new industries, they will take time to grow. Renewable energy sources will not replace coal fired utilities in the short run, however, unless new government regulations strangle those suppliers with excessive costs.
Old regulation cuts and changes are fine but businesses are still concerned about new regulations that will be made in the next two years. Time will tell.
Obama’s re-election depends on working with the Republican Party on spending cuts and deficit reduction. He needs to stay the course for the economy to improve and grow more jobs. The economy must get better for President Obama this year, for him to take the credit to get re-elected in 2012.
There are still many unanswered questions. As Americans, we are banking on political compromise and co-operation by all parties. Or we all face sad consequences.
— Bernard Featherman can be reached by e-mail: bernard@featherman.com.
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