Archive for September, 2012


Thursday, September 13th, 2012

A year has past since President Obama proposed to Congress the American Jobs Act, which had the potential to create over a million jobs. The Republicans, who hold the majority in the House of Representatives refused to consider it and the minority Republicans in the Senate blocked a vote on it by threatening a filibuster. Now, after the blatant obstructionism, the Congressional Republican leadership as well as the Republican president and vice-presidential candidates are exploiting this alleged policy failure, for political gain, by pointing out the disappointing jobs numbers last week and claiming that this is the result of the failure of President Obama’s policies1. This seems to be both unfair and extremely hypocritical. In fact, the failure of Congress to pass the American Jobs Act is due directly to Republican obstructionism and is both irrational and certainly not in the country’s best interest. Since the beginning of the 2008 recession, both in the US and around the world, there is a myriad of evidence that temporary increases in stimulus spending boost employment while austerity induced spending cuts lead to more unemployment.

Both Moody’s Analytics and the Economic Policy Institute have predicted that if Congress had passed the American Jobs Act between 1.9 and 2.6 million new jobs would have been created. This would have lowered the national unemployment rate that’s now over 8% to perhaps 7.1%. The Macroeconomic Advisors agreed and along with Goldman Sachs, estimated that there would have been a boost of the GDP of 1.5%2. The bill, if passed, would have provided an economic boost nationwide through investments in infrastructure projects as well as tax credits for working Americans and employers which would have given a boost to consumer spending. As important, it would have supplemented State budgets all over the country thereby preventing further layoffs of teachers, firefighters, police officers and other public safety officials.

As pointed out in the blog entry of 7-24-2012, the loss of public job growth in the last 3 years due to the lack of continued stimulus to the public sector of the economy is the single biggest factor in the slower than expected country-wide job growth and in preventing more vigorous economic recovery3.  IPPA strongly feels that there is an ethical imperative for the Republicans in Congress to stop this hypocritical obstructionist stance and pass the American Jobs Act immediately. Our country needs and deserves this added stimulus right now.