Jobs speech: YouTube of full 33 minutes

[marcus]

It took me a while to find a video of the complete speech, so I thought I'd share this link in case others want to watch it. He gets a lot into 33 minutes.

 

[Char. Limit]

Is this where we're going to discuss the speech? Because I feel that's inevitable.

 

[DoggerDan]

Not I. I heard he tried the humble pie approach.

Whoops! pardon...

 

[marcus]

Is this where we're going to discuss the speech? Because I feel that's inevitable.

There's plenty positive that one can say about the speech. It will become significant if there is a change of mood in the country leading to a popular call for government to take initiatives for common goals---to renew infrastructure and education, to revitalize the middle worker/consumer core of society.

By itself the America's Jobs Act is certainly not enough, just a step in the right direction--see Robert Reich's comment ("two cheers and a jeer") http://robertreich.org/post/9984121331

 

[WhoWee]

Personally, I think a short term (3 to 4 month) extension of unemployment benefits is better than a 12 month extension - even if benefits will continue to be extended for 24 to 36 additional months. A shorter renewal time instills a sense of urgency to re-engage.

I'm a little disappointed that President Obama didn't have a complete strategy to present and that he wants funding to be intertwined with the Congressional deficit reduction effort. Also, I don't trust any plan that spends an additional $400Billion today and proposes cuts in 10 years - especially when the President is attempting to change the agreed upon structure and task of the debt reduction committee before their first meeting.

If anything, I think President Obama just opened the door for Mitt Romney's plan to be considered as an alternative.

 

[mheslep]

It is not the job of the US federal government to renew education or revitalize 'workers'. However, the federal government can and has created impediments to both.

 

[mheslep]

...
By itself the America's Jobs Act is certainly not enough, just a step in the right direction--

Where would you have the government get the money to take said step?

 

[Ivan Seeking]

It is not the job of the US federal government to renew education or revitalize 'workers'. However, the federal government can and has created impediments to both.

What does it mean to "renew education" and "revitalize workers"?

 

[edward]

Where would you have the government get the money to take said step?

We can start by lowering the Corporate tax rate and get the big corporations paying taxes in this country again.

Even when they off shore their headquarters they still pay taxes. There is a town in Switzerland named Zug. They have dozens of American corporation with headquarters registered there. Many of them are simply a store front or just a mail box.

http://www.cbsnews.com/stories/2011/03/25/60minutes/main20046867.shtml

Our government is in knots over ways to lower the federal budget deficit. Well, what if we told you we found a pot of money - over $60 billion a year - that could be used to help out?


That bundle is tax money not coming into the IRS from American corporations. One major way they avoid paying the tax man is by parking their profits overseas. They'll tell you they're forced to do that because the corporate 35 percent tax rate is high in relation to other countries, and indeed it seems the tax code actually encourages companies to move their businesses out of the country.

We can't afford to stimulate the economies of other countries.

 

[Ivan Seeking]

We can start by lowering the Corporate tax rate and get the big corporations paying taxes in this country again.

Even when they off shore their headquarters they still pay taxes. There is a town in Switzerland named Zug. They have dozens of American corporation with headquarters registered there. Many of them are simply a store front of just a mail box.

http://www.cbsnews.com/stories/2011/03/25/60minutes/main20046867.shtml

So then it is your position that we should have the lowest tax rates in the world? Surely the same problem will exist if there is ANY place to go that has lower rates than ours. Given that places like the Cayman Islands have no taxes, it seems that we need to eliminate all taxes in order to capture lost corporate taxes.

And what about labor laws, environmental laws, product safety, OSHA, the USDA, and the FDA? These are all thorns in the side of industry. By the logic of the tax argument referenced, shouldn't these be eliminated as well? Shouldn't we do whatever it takes to entice industry?

 

[Ivan Seeking]

Also, I don't trust any plan that spends an additional $400Billion today and proposes cuts in 10 years -

What else can be done given the state of the economy and our level of debt? It's a catch 22. I doubt that anyone thinks it's a good option or even an acceptable option. What I do seem to see is that it's our only practical option.

We have to bet the economy will get better, right? Are we going to bet that America fails. And if so, if we are going to bet that we don't make it, then what does it matter anyway - borrow as fast as we can and break out the booze!

 

[edward]

So then it is your position that we should have the lowest tax rates in the world? Surely the same problem will exist if there is ANY place to go that has lower rates than ours. Given that places like the Cayman Islands have no taxes, it seems that we need to eliminate all taxes in order to capture lost corporate taxes.

And what about labor laws, environmental laws, product safety, OSHA, the USDA, and the FDA? These are all thorns in the side of industry. By the logic of the tax argument referenced, shouldn't these be eliminated as well? Shouldn't we do whatever it takes to entice industry?

WOW you sure added your own elaborate opinion to a simple idea. I would rather see the 20% in taxes that is going to Switzerland go to America. Thats about it.

We simply can't go on the way we are.

 

[russ_watters]

Here's Obama's fact sheet on it: http://www.whitehouse.gov/the-press-office/2011/09/08/fact-sheet-american-jobs-act

Here's my problem with it:

To ensure that the American Jobs Act is fully paid for, the President will call on the Joint Committee to come up with additional deficit reduction necessary to pay for the Act and still meet its deficit target. The President will, in the coming days, release a detailed plan that will show how we can do that while achieving the additional deficit reduction necessary to meet the President’s broader goal of stabilizing our debt as a share of the economy.

So he is going to spend a bunch more money, while simultaneously saying he'll tell us how we should pay for it in a few days (hasn't he been working on this plan for a month?), but also says he wants the deficit committee to figure it out. What if what he comes up with in a few days is something the deficit committee also would have come up with? Even assuming he comes up with viable ideas, he's making their job harder by taking options away from them.

Six weeks. That's all it took for Obama to push us in the opposite direction of the debt deal. And he wants us to believe it's the Republicans who are negotiating in bad faith? This is exactly like what happened to Reagan and exactly why Tea Party Republicans were so uncompromising on taxes. Cutting spending is hard. Increasing spending is easy. Increasing spending immediately after agreeing to cut spending is a broken promise. That's why instead of an agreement to raise taxes now and maybe cut spending later if we can figure out how, possibly, maybe we needed a no-compromise position on taxes. Obama needs to put forward a plan to cut spending now and maybe we can talk about raising taxes after that's done, possibly, maybe.

Obama is great at specific plans to spend more. Not so good at plans to spend less (I seem to remember someone starting a thread on that...).

 

[Ivan Seeking]

WOW you sure added your own elaborate opinion to a simple idea. I would rather see the 20% in taxes that is going to Switzerland go to America. Thats about it.

We simply can't go on the way we are.

And what about all of those places that have a lower tax rate or none at all. Why is Switzerland the unique target?

I wasn't adding my own ideas, I was extending the logic.

 

[Ivan Seeking]

Obama is great at specific plans to spend more. Not so good at plans to spend less (I seem to remember someone starting a thread on that...).

That's right, because right now is not the time to spend less. Now is the time for stimulus spending in spite of the debt. We have no choice. We need to wait until the economy regains strength. Drastic spending cuts right now could make things worse.

Would you have voted against the bank bailouts were you in Congress at the time?

 

[edward]

And what about all of those places that have a lower tax rate or none at all. Why is Switzerland the unique target?

I wasn't adding my own ideas, I was extending the logic.

The town in Switzerland was the (unique) target only because that is the one covered in the link provided. ??

 

[DoggerDan]

That's right, because right now is not the time to spend less.

Why?

Now is the time for stimulus spending in spite of the debt.

Why?

We have no choice.

We always have a choice.

We need to wait until the economy regains strength. Drastic spending cuts right now could make things worse.

Thanks for answering that one! I don't agree with your answer, though.

Would you have voted against the bank bailouts were you in Congress at the time?

I would have, yes. Bailouts, emergency relief, and declaration of disaster areas tend to reinforce irresponsible behavior, which in turn leads to even more neediness in the future. On the other hand, reinforcement of the idea that "you're on your own, so don't build on flood plains (or if you do, use stilts), build to withstand hurricanes, and if you put your money into a bank, be sure to research it first" tends to reinforce caution and self-reliance.

Scrubbing rotten tissue from a wound hurts and seems to makes things worse, but only temporarily. Unburdened of the rotten tissue, the wound heals as healthy tissue grows. Spending cuts are little different. Whatever they may hurt is rotten tissue, and healthy tissue can't take its place until the rotten tissue is excised.

I'm with Russ Waters on this one.

 

[ParticleGrl]

Here is a simple jobs idea- right now infrastructure in the US is horrible. Operator error somehow knocked out power for more than 12 hours to millions of people between Yuma, AZ and Tijuana, Mexico just yesterday. Everyone agrees our infrastructure has to be replaced eventually.

Also, right now, borrowing costs for the government are at an all time low. People are lining up to loan money to the government AT A LOSS. ITS CHEAPER TO BORROW MONEY THAN PAY CASH.

So, we have to replace infrastructure eventually, and its cheapest to do it RIGHT NOW. Thats good policy just on the face of it. As a side effect, guess what, people get put to work.

 

[WhoWee]

Here is a simple jobs idea- right now infrastructure in the US is horrible. Operator error somehow knocked out power for more than 12 hours to millions of people between Yuma, AZ and Tijuana, Mexico just yesterday. Everyone agrees our infrastructure has to be replaced eventually.

Are you certain the blackout was due to infrastructure problems - the news reports I heard blamed operator error.

 

[ParticleGrl]

Are you certain the blackout was due to infrastructure problems - the news reports I heard blamed operator error.

If one operator mistake can kill power from Yuma to Tijuana, its an infrastructure problem. A functioning system isolates the problem.

 

[WhoWee]

If one operator mistake can kill power from Yuma to Tijuana, its an infrastructure problem. A functioning system isolates the problem.

It sounds like a utility company problem - not a taxpayer bailout problem to me. Perhaps someone knowledgeable can help explain it to us?

 

[edward]

It sounds like a utility company problem - not a taxpayer bailout problem to me. Perhaps someone knowledgeable can help explain it to us?

The power grid has been deteriorating for years. The last time AZ had a major outage it originated in Idaho.

The national power grid received a D+.

http://articles.cnn.com/2009-01-28/us/infrastructure.report.card_1_drinking-water-infrastructure-aging?_s=PM:US

 

[russ_watters]

That's right, because right now is not the time to spend less. Now is the time for stimulus spending in spite of the debt. We have no choice.

Yeah, there really is always a choice. More importantly, Obama made an agreement and a promise. Are you suggesting that you think it is ok for Obama to negotiate in bad faith? To make promises that he doesn't intend to keep or intends to pass off to others to keep for him?

We need to wait until the economy regains strength. Drastic spending cuts right now could make things worse.

Regardless of when they happen, spending cuts will always make things worse in the short term -- but they will make things better in the long term. If the debt was small, the long-term pain wouldn't be very severe, but the larger the debt, the worse-off we are in the long term if we raise it more. That's why the Europeans are in so much trouble right now and what you are advocating simply puts us further into the hole they are in.

Would you have voted against the bank bailouts were you in Congress at the time?

I'm not sure. I certainly didn't like them as a matter of principle, but they ended up working and being nearly balance sheet neutral. Balance sheet neutral. Balance sheet neutral. So there's a big difference between TARP and the stimulus there. One costs money in the short term but you get almost all of the money back and the other costs money that you never get back. One stops a panic and prevents a crash, the other just transfers GDP from the future to the present (at less than 100% efficiency due to interest and waste).

 

[russ_watters]

Also, right now, borrowing costs for the government are at an all time low.

While that's true, your position presupposes that the increase in the debt will be temporary and then the money will be paid back before borrowing costs go up. Do you really think that will happen?

 

[ParticleGrl]

While that's true, your position presupposes that the increase in the debt will be temporary and then the money will be paid back before borrowing costs go up. Do you really think that will happen?

The real rates are negative on everything up to 10 years. 30 years are slightly positive rates, but still historically low. We can borrow today, pay it off over 30 years, and have those low rates. Keep in mind that most of the time the government DOES run a surplus/grow out of debt (one or the other, sometimes both). Only two presidents since WW2 have increased debt/GDP during periods of economic growth (Reagan and W. Bush).

Further, we don't have a choice- eventually large sections of the grid will be replaced, and we prevent productivity loss by doing it sooner (a stitch in time saves nine, as they say). This isn't NEW spending, its moving future spending to today where (oddly) it costs less. We will almost certainly have to replace large chunks of our power infrastructure in the next 30 years. Instead of spreading the spending out, let's take out a mix of 10 and 30 year bonds to do it now. This has several advantages

1. total cost is lower (only because of the weird negative real rate situation we find ourselves in- this is totally inverted to the usual idea of credit)
2. it front loads the work now, giving people jobs while the private sector gets moving on hiring, lessening the pain of the recession
3. If we decide to go "smart grid" in our upgrade, its a chance for private sector entrepreneur's to fill new niche's in the economy (if we announce the spending is happening over the next X years it cuts down on regulatory uncertainties. I know of two start-ups with quality products that went under because US utilities have little interest in large upgrades).

I certainly didn't like them as a matter of principle, but they ended up working and being nearly balance sheet neutral. Balance sheet neutral. Balance sheet neutral. So there's a big difference between TARP and the stimulus there.

TARP was balance sheet neutral because of the crazy direct involvement of the Fed related to propping up large banks. We could make the stimulus revenue neutral by printing money. This points to the larger issue that the fed is doing a great job with its inflation mandate, but a truly terrible one with its employment mandate- creditors are being protected at the expense of debtors. Its a great morality tale, but economics shouldn't be about morality, it should be about laying the groundwork for the best growth.

edit:

the other just transfers GDP from the future to the present (at less than 100% efficiency due to interest and waste).

That should say minus interest- (real rates are negative), so it means that we get more bang-for-the-buck by borrowing than by spending-within-our-means. See this post- http://modeledbehavior.com/2011/09/09/moving-the-overton-window-why-is-the-us-government-still-collecting-taxes/

 

[russ_watters]

The real rates are negative on everything up to 10 years. 30 years are slightly positive rates, but still historically low. We can borrow today, pay it off over 30 years, and have those low rates.

Sure, we can, but are you really saying you think we will?

Keep in mind that most of the time the government DOES run a surplus/grow out of debt (one or the other, sometimes both). Only two presidents since WW2 have increased debt/GDP during periods of economic growth (Reagan and W. Bush).

The debt and debt to GDP ratio are rising faster than they have at any time in those last 50 years. So what makes you think that we'll surplus or grow ourselves out of this? History isn't for you here, it is against you. Heck, Obama's own analysis of his last stimulus indicated no long term unemployment benefit.

Further, we don't have a choice...

People need to stop saying that here. The only time you don't have a choice is if what you want to do is physically impossible.

...eventually large sections of the grid will be replaced, and we prevent productivity loss by doing it sooner (a stitch in time saves nine, as they say). This isn't NEW spending, its moving future spending to today...

Replacing something that doesn't need to be replaced is throwing money away. If something has a 50 year lifespan and you replace it 10 years early, you're increasing your purchase costs by 20%. Now granted, there are maintenance cost savings involved in early replacement, but I'd be surprised if in the case of a road or electric line they actually override that.

That should say minus interest- (real rates are negative), so it means that we get more bang-for-the-buck by borrowing than by spending-within-our-means.

Again, only if we pay the money back before interest rates go up. We're digging ourselves a really big hole right now. This is a trap, very similar to a low introductory rate on a credit card. It's a bad idea even in good times and in bad times, it makes a big hole even bigger.

 

[ParticleGrl]

The debt and debt to GDP ratio are rising faster than they have at any time in those last 50 years. So what makes you think that we'll surplus or grow ourselves out of this?

If we don't, then rates will stay low. Also, our economy is very obviously not operating at capacity. Unless you are suggesting unemployment isn't going to recover for 30 years (in which case, the debt is the least of our problems), we will begin to grow our way out of any debt taken on now before the 30 year roll-over.

Unless something truly absurd happens (a debt ceiling debacle forces a default, or something equally stupid), then rates will be low until the economy begins to recover. So either we are growing our way out of debt, OR rates are low.

People need to stop saying that here. The only time you don't have a choice is if what you want to do is physically impossible.

Fine, IF we want to provide people with consistent power, we don't have a choice.

Replacing something that doesn't need to be replaced is throwing money away.

You clearly didn't read the link above discussing the quality of our power grid. Much of our grid DOES need to replaced, that's the whole point. This IS work that needs to be done.

This is a trap, very similar to a low introductory rate on a credit card.

Why are the rates low right now? What would cause rates to go up? Can the US default? In other words, how is this in anyway like a credit card? Always remember, the government has a printing press (thats what made TARP revenue neutral).

I hope we can agree if the government wanted to, it could directly employ every unemployed person, even if just digging ditches. Let's say we decide to do that (I'm not saying this is a good idea), would it be better to borrow at negative rates to do this? Or print money to make it revenue neutral?

 

[skippy1729]

The repeated urgent calls to "pass the bill right now" together with the fact that the bill is not yet written is a big red flag for me. Is this another "we have to pass the bill to find out what's in it"? Another "not that shovel ready after all"? Fool me once, shame on you, fool me twice, shame on me. This is not about jobs or leadership, it is about using the power of a joint session of congress and a good speech writer to try to get his ratings out of the toilet.

skippy

 

[WhoWee]

The repeated urgent calls to "pass the bill right now" together with the fact that the bill is not yet written is a big red flag for me. Is this another "we have to pass the bill to find out what's in it"? Another "not that shovel ready after all"? Fool me once, shame on you, fool me twice, shame on me. This is not about jobs or leadership, it is about using the power of a joint session of congress and a good speech writer to try to get his ratings out of the toilet.

skippy

Unfortunately - I think you are correct.

 

[russ_watters]

If we don't, then rates will stay low?

You mean if we stay in an economic doldrum, rates will stay low? Agreed, but I think one way or another, we'll recover. Obama's famous unemployment graph shows that he thought when he passed the first stimulus that when it was over, we'd have no net gain at all in employment. In other words, six years from now, when it has worn off, we'll have gained nothing and we'll have more debt to show for it.

So the question is: when we recover, do we want a big debt or an enormous debt?

Also, our economy is very obviously not operating at capacity. Unless you are suggesting unemployment isn't going to recover for 30 years (in which case, the debt is the least of our problems), we will begin to grow our way out of any debt taken on now before the 30 year roll-over.

We'll only be growing our way out if the growth is faster than the increases in the debt. And even then, the bigger the hole, the more growing we have to do to get out of it. So while it's fine and factually true to say that in 10 years we'll be growing our way out, it is still misleading because it ignores the fact that we'll be growing out of a worse condition than if we hadn't added so much more debt to begin with. I'd much rather have to grow out of 56% debt to gdp ratio than 82% - wouldn't you? (That's the difference between the CBO's baseline and their estimate of Obama's last budget request, projected for 2019: http://www.cbo.gov/ftpdocs/100xx/doc10014/Chapter1.5.1.shtml )

Fine, IF we want to provide people with consistent power, we don't have a choice.

You clearly didn't read the link above discussing the quality of our power grid. Much of our grid DOES need to replaced, that's the whole point. This IS work that needs to be done.

There's a big difference between needing to be done today and needing to be done "eventually", which is what you said before.

Yeah, I read the link and I read plenty of the articles about our infrastructure quality after that bridge in Minneapolis collapsed a couple of years ago. They use pretty dire sounding language, don't they? Our infrastructure is in terrible shape, right? I know that's how the media reports it, but if we're not seeing even yearly massive blackouts or bridge collapses, then things really aren't that bad. Our infrastructure is doing its job just fine. Yes, eventually large portions will need to be replaced. But to convert "eventually" into immediately is just scaremongering for political purposes.

Why are the rates low right now? What would cause rates to go up? Can the US default? In other words, how is this in anyway like a credit card?

Borrowing when you get a low rate to the point where when the economy bounces back and rates go up you can no longer afford the interest payments. That's not just credit cards, it's the sub-prime mortgage crisis in a nutshell!

Always remember, the government has a printing press (thats what made TARP revenue neutral).

Oy, really? You want to inflation our way out of this? How 'bout this - we skip the extra debt and inflation our way out of what we have now?

And no, TARP wasn't revenue neutral because we printed money, it was revenue neutral because we got paid back.

While it was once feared the government would be holding companies like GM, AIG and Citigroup for several years, those companies are preparing to buy back the Treasury's stake and emerge from TARP within a year.[4] Of the $245 billion invested in U.S. banks, over $169 billion has been paid back, including $13.7 billion in dividends, interest and other income, along with $4 billion in warrant proceeds as of April 2010. AIG is considered "on track" to pay back $51 billion from divestitures of two units and another $32 billion in securities.[4] In March 2010, GM repaid more than $2 billion to the U.S. and Canadian governments and on April 21, GM announced the entire loan portion of the U.S. and Canadian governments' investments had been paid back in full, with interest, for a total of $8.1 billion.[5]

I hope we can agree if the government wanted to, it could directly employ every unemployed person, even if just digging ditches.

Agreed, it could.

Let's say we decide to do that (I'm not saying this is a good idea), would it be better to borrow at negative rates to do this? Or print money to make it revenue neutral?

I wouldn't do either of those things and don't believe they are the only choices, so I won't accept being backed-into that corner.

 

[mheslep]

The low interest rates of today will not remain low. Unlike borrower via the personal credit card or car loan, the federal government does not intend to pay off its debts in two or five years, it intends instead to roll over those debts on to new future debt with future interest. rates. So borrowing today with no concern to the future is the Lehman Brothers plan, is reckless, and may lead to similar results.

Edit: A plan to pay off the US debt over 30 years would mean increasing spending by ~$500B a year to pay off the lenders, and that is after zeroing the current $1.6T deficit immediately.

 

[Vanadium 50]

Six weeks. That's all it took for Obama to push us in the opposite direction of the debt deal.

Well, to be fair, the fiscal year is almost over. He needs a new budget in three weeks.

That has other problems: there isn't a President's Budget for FY2012. Well, there was, in February, but a) the Senate voted it down 0-97, and b) in April, the Presidents' speech (of "we don't score speeches" fame) indicated that the President himself was no longer in favor of that budget either.

 

[WhoWee]

Well, to be fair, the fiscal year is almost over. He needs a new budget in three weeks.

That has other problems: there isn't a President's Budget for FY2012. Well, there was, in February, but a) the Senate voted it down 0-97, and b) in April, the Presidents' speech (of "we don't score speeches" fame) indicated that the President himself was no longer in favor of that budget either.

It's only fair to give him credit when credit is due - he clearly realized his budget proposal was a bad plan. I'm just not sure if he would agree as to WHY it was a bad plan?