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According to figures released last week, presently there are approximately 13.9 million unemployed Americans. We have heard from the punditry that President Obama will succeed or fail based on whether more Americans find work or don’t. The president’s hope of a second term may be in jeopardy because of the unemployment crisis.
Is that fair? Do presidents really create jobs?
Yes, they do, if you are talking about federally funded jobs programs or adding more employees directly to the federal payroll. The problem with that is the government needs surplus and revenue to pay for those types of things, and not everyone wants to join the military.
The surplus Clinton left Bush was demolished and turned into a gaping deficit thanks to a massive giveaway of the surplus, two wars waged on borrowed money, tax cuts and medicare reform.
Revenue comes from taxes imposed on people working within the arena of the free market. The cure to our employment and economic woes is for the private sector to hire more people and thereby increase revenue to pay for the deficit.
Most of our jobs have been lost to cheaper overseas labor. What used to be “American” companies are now global companies. Their mission is to employ the most productive workers for the smallest wages. Unless Americans are willing to settle for wages on par to those earned by Chinese and Indian workers–a paltry percentage of what we think of as a living wage–those jobs aren’t coming back.
What about small business in America (the back bone of our economy, I’ve heard)? Assuming a small business employs about a hundred people, America needs approximately 30,000 fully capitalized entrepreneurs with winning business plans to hire approximately 3 million workers and be able to pay them more than minimum wage. From President Obama’s point of view, it would be really cool if that happened well in advance of November 2012.
An unprecedented explosion in viable small businesses, coupled with sensible cuts in spending at the federal level, and raising taxes might keep us from being deposed as the number one economic power in the world, and secure Obama a relatively easy win in 2012.
I’m not holding my breath.