WE all have seen politicians, in every election, promoting ‘soundbite economics’. Recently, I saw Obama’s economic election campaign in social network website ‘Facebook’ and also in media. Many people are reckoning President Obama is no different than any previous president. Though he was elected prognosticating to bring a real change for the future, but it now seems all hopes and trusts of the American people has turned into ‘a lost opportunity’. Though his policy certainly averted a sprouted great depression, but the negative employment growth has considerably worried many. The U.S. economy, the world’s largest economy since 1870, historically, a stable overall GDP growth rate, a low unemployment rate and high levels of research and capital investment funded by both national and foreign investors because of its decreasing saving rates, is falling down and the U.S. stock exchange’s dramatic up down has certainly bewildered and confused not only the economists but also the policy makers. The recent stumbling over Gulf oil disaster has raised a question of the economic irregularity. Though 30% of the entire world’s millionaire populations reside in the United States and 40% of the world’s billionaires are American, and the U.S. having a holder of 60% of world reserve, still the Obama’s economic policy has insufficiently brought a clear change into the American economy.
The most talkative US health care reform, for which the government has spent 70% of its GDP, has been criticized by most of the American conservatives, as it costs more to the employers in hiring by mandating insurance coverage. Obama’s tax reform has also been subject of critics stating it‘ll make the liberals richer. Small medium enterprises (SMEs) will also be affected as the higher tax bracket discourages to hire more employees and so is the industrial expansion. The overall economic position of the U.S. is unsound. The combined debt of households, businesses and government constituted $50.7 trillions, representing more than 3.5 times of its GDP. The unchecked import growth of energy is making the US more reliant on foreign oils. Though U.S. manufacturing sector remains the world’s largest consisting 19% of the world’s, but it has created largest unemployment during this short recession – one unemployment in every six factory jobs. The trade deficits has come down to $ 240bn (2.9% of GDP) in 2009 compared to $700bn (4.9% of GDP) in 2008 due to recession. Unemployment has increased to 15mn and another 11mn labor force work involuntarily part-time or had dropped out of labor force as per the Economic Policy Institute (EPI).
The Democrats complain that Obama is getting a bad rap in the media. Obama’s job is still unappreciated. Many critics said his inconstant confidence has brought the economy down. Though he is talking about job creation, recovery and reform, but his uncertainty argument and dualistic approach has waged a bit more to the US economy. As a great orator, in his magnificent illustrative words, “To every American who’s looking for work, I promise you we’re going to keep on doing everything we can. I’ll do everything in my power to help our economy create jobs and opportunities for all people.” It’s clear that Obama is making every effort to influence the Democratic race. His recent proposal of stop outsourcing might discourage the US companies but it‘ll incur more costs because of the cost effectiveness. To save some tax break, the US companies have to spend more money on hiring labor force compare to the low cost labor intensive county like India.
The vast and complex US economy, which affects the whole world economy, though it is very tough task to manage, having a long term budget deficits and a bit hard to focus on present recovery to bring into a more stable level, but it should not be stay on political choices and benefits.
Picture courtesy: sultanknish.blogspot.com