When the stimulus bill was passed in the spring the voters was told that unemployment would not rise over eight percent. Recently the figure has reached 10.2 percent. By the way where is the public outrage? I have not heard the administrations excuse for this miscalculation. Somehow this will be blamed on the former administration. That excuse is the current administrations favorite excuse. However, that excuse has been worn out. Once the stimulus bill was passed the administration in power bought the economy.
Many times you hear reducing taxes is the only way to create jobs. That may be true but there are other events that kill the atmosphere for new job creation. Let’s review what has happened over the summer. GM and Chrysler were bailed out. The government is now a large owner of GM. Somewhere in the shadows is a Cap and Trade bill which could possibly increase the cost of energy for all companies. The healthcare reform bill debate is going on hot and heavy. No one really knows what this bill is going to cost companies and the voting public. America’s debt continues to spiral upwards. The banks that received TARP money are having wages scrutinized and may be forced to reduce these large wage packages. Afghanistan indecision has not been resolved.
In addition to these governments created events there are international events that are creating additional problems. Iran is not any closer to a nuclear compromise. North Korea continues to cause friction. The Middle East problem continues to be far from resolved. We are still dependent on foreign oil. The world continues to be a dangerous place.
What are all these events creating? If you thought uncertainty you are correct. All of the above creates uncertainty in business decisions. I was responsible for a profit and loss statement for close to twenty years. When I was uncertain of a situation I waited and held back until the atmosphere cleared. I sure did not expand and hire new employees during a period of uncertainty. What would I do today if it was my responsibility? I would definitely wait until I knew how much this gigantic healthcare reform is going to cost the business. Also, the Cap and Trade legislation expense could be a big factor in adding new employees.
Both of these issues have been created by the current administration. Until this cloud is removed from the sky I predict that unemployment will not decline in the near future. The stimulus package may have worked alone. However, the other ambitions of the administration killed the benefits of the stimulus package. Talk about shooting yourself in the foot.