Obama Outlines Bailout for Main Street

Today President Obama spoke on job creation and how America needs to “spend our way out of this recession”. The plan touches on job creation through major infrastructure projects, tax incentives for small business owners (which don’t seem to impact the mom & pop businesses), and take the monies not spent from TARP and inject them into job creation instead of deficit reduction.

Looking at the national unemployment rate of 10.2%, local unemployment rate remains at 8.8%, it is hard to argue that Americans need jobs to aid the national recovery process. The flip side of Obama’s job creation plan is a further increase in the national deficit. So far the Republicans have been very vocal about this section – funny – as they where in control when the deficit was rising faster than any other time in history.

But I have a question: Can you have job creation without an increasing national deficit in a struggling economy? Right now it seems highly unlikely.

Here are the highlights from Obama’s job creation plan.

Zero capital gains for small business investments

To encourage investment by small businesses and improve their access to capital, the Obama administration called for a one-year elimination of the tax on capital gains from new investments in small business stock. The Recovery Act allowed a 75% exclusion from capital gains taxes on small business investments.

Enhanced expensing provisions for small businesses

The Obama administration called for the extension through 2010 of the Recovery Act provision that allows small businesses to immediately expense up to $250,000 of qualified investment.

Cut taxes for small businesses

Many businesses remain reluctant to hire. In this economic environment, an employment tax cut for small businesses has the potential to accelerate the pace of hiring.

The Administration believes it is important to provide a short-term tax incentive to encourage small business hiring and support employment, and will work with Congress to design a provision that accomplishes these goals.

Cut taxes for small businesses

Many businesses remain reluctant to hire. In this economic environment, an employment tax cut for small businesses has the potential to accelerate the pace of hiring.

The Administration believes it is important to provide a short-term tax incentive to encourage small business hiring and support employment, and will work with Congress to design a provision that accomplishes these goals.

Energy efficiency

The President called on Congress to consider a new program to provide rebates for consumers who make energy efficiency retrofits.

Such a program will harness the power of the private sector to help drive consumers to make cost-saving investments in their homes.

Investments in clean energy

The Recovery Act included investments that have helped to build the foundation for a clean energy economy.

The Administration supports expanding programs for which additional federal dollars will leverage private investment and create jobs quickly, such as industrial energy efficiency investments and tax incentives for investing in renewable manufacturing facilities in the U.S.

How to pay for it?

Because of the Administration’s stewardship of the TARP program – combined with our broader efforts to revive the economy – the administration now expects the cost to be at least $200 billion less than anticipated as recently as August.

Since the Obama Administration has taken office, only $7 billion has been provided in assistance to banks, compared to $114 billion in capital that banks subject to the “stress test” have raised from the private sector.

These savings will allow us to pay down the deficit faster than was anticipated while also investing funds that would have gone to banks in job creating efforts instead.

*end of highlights

There will be plenty of discussion on this topic and I just finished reading the many comments on the Business.Newsvine.com site. There are some really intelligent responses and others are just wasted space with political groaning. After all the comments, the one that stood out the most for me was by jack c-1506422.

i don’t rightly give a crap ! ! , i’ve been unemployed for 20 months now..if there’s a way to get me working again, i’ll take my chances ! ! , i’d shovel at a sewer treatment plant with a smile on my face and be a half hour early to work, if there was work…. i love this ” just cut taxes ” .. morons ! ! how can you cut what i don’t have, if i don’t make any paycheck taxes, what the hell good is cutting taxes going to do for me… i don’t care, just get us back to work ! ! what is so hard to understand about that.. i have no plans to win the battle, i just want to work…if you think standing up and denying any of us the slightest chance to have some kind of work is going to help get your party elected is nuts ! ! , i don’t give a damm about the deficit, that’s always going to be there, if there’s a chance that there’s going to be jobs out, let’s get it done, if we can bail out big banks, we can put people back to work, just give me / us a chance at that shovel at the sewer plant, we’ve failed long enough to not see this growing unemployment problem, 10% / 11% , is just the ones that can get unemployment benefits.. 16% is closer to what it really is

Jack C’s comment illustrates the feelings, stress and a desire to have a job. America has to have jobs and that means thinking of new ways to create them but it is funny that the comments do not discuss job creation and none (when I read through the comments) none posed a solution.

Here is my 2 cents on job creation. As a world leading country, it is America that has to lead by example. Looking at the environmentally friendly energy industry there is a lot of opportunity to 1) create jobs, 2) become a global leader in an emerging industry, 3) become less reliant on foreign countries that deplete American resources.

Inject funds to companies that are growing their operational scale in order to 1) provide jobs and 2) and can deliver environmentally friendly products to the America public. Sounds simple but I bet it can be done if there was more cooperation in the government instead of political bickering.

Less talk and more action – Let’s get America back to work and start helping the citizens of this country.

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