Following the debt-ceiling deal, much of the talk in Washington has turned to job creation. But can the government create jobs? Its track record isnt so hot on that front.
In fact, the federal government had a large hand in creating the conditions that led to the worst recession in decades and the loss of millions of jobs. And too many Americans took advantage of those conditions (or were taken advantage of) to fund lifestyles over their heads.
Jobs are being created, but not fast enough to reduce unemployment to a reasonable level. One reason is that the strength of the economy is largely driven by consumer spending. High unemployment means less spending. Job uncertainty means less spending. More Americans are paying down debt and saving more, which means less spending. Cutting back on spending means fewer products and services, which means many companies still arent adding workers, and some continue to shed jobs.
And all of this is exacerbated by a mordant housing market, which is still hampered by foreclosures and little new building.
Theres more to it than that, but it shows why the federal government isnt going to be the savior of the economy. It could do more to help keep the economy from tanking again, but that would require more spending, something thats unpalatable to too many in Congress, and likely higher taxes, which also faces an uphill battle.
At the risk of sounding like a broken record, we repeat that the administration and Congress need to come up with a long-term plan to address budget deficits, the national debt and, yes, the economy. And all options must be explored, but tax reform is the big one.
The supercommittee created by the debt-ceiling compromise has its work cut out for it, considering its hyperpartisan makeup. But it must address longstanding roadblocks to economic stability and debt reduction with long-term thinking and action. It took years of bad policies, mismanagement and political posturing to get us where we are today. It will take years to get out of it.
The supercommittee, the administration and Congress must put aside bitter partisanship and start working for the American people for a change.
