Current Economic Situation is No “Bump in the Road”
While the administration was quick to declare the recent increase in unemployment to 9.1 percent a “bump on the road to recovery,” the reality is the month of May marks the 28th straight month of unemployment hovering on average above 9 percent. First, this figure represents a deeply troubling trend for our struggling economy. Second, and more importantly, the number is an abstract way of describing the very real plight of 13.9 million Americans who are out of work.
To explain this “bump in the road,” Americans have heard a lot lately about the “headwinds” facing the U.S. economy, which some leaders in Washington have attributed to natural disasters in Asia or a sovereign debt crisis in Europe. But in reality the strongest and most enduring headwinds beating against the U.S. economy are many of the failed economic policies created right here in Washington.
Americans are facing burdensome government regulations, costly mandates on businesses of all sizes, stalled trade agreements, unsustainable government spending adding to our 14.3 trillion dollar deficit, and threats of tax increases. In the President’s 2012 budget alone, for example, there are 43 tax hikes. The Obama health law, which saddles families and businesses alike with costly regulations, is adding to the economic strain. These are the policies undermining our economic recovery and stifling job creation.
In particular, small businesses and their employees have been hard hit. For those still in business, many are simply trying to keep their enterprises operating in an environment where 2011 first quarter growth was an anemic 1.8 percent. And those businesses with cash reserves remain cautiously averse to the risk of adding new employees and expanding. This is borne out by the fact that only 54,000 new jobs were added nationwide in May – an astoundingly low number considering there are approximately 120,000 new entrants to the job market each month. The fact is, the current economic environment is not conducive to job creation nor economic growth.
In order to create jobs, employers need a firm sense of confidence, transparency, and reliability from the government when it comes to taxes and regulations. Nevertheless, the administration continues to resist even these basic imperatives for economic growth. The President and some in his party in Congress have said they are fully committed to raising tax rates beginning in January of 2013. What does this message send to an individual or business planning for the future?
If the goal is to create jobs – as most in Washington will at least say is their number one priority – these policies are not the means to achieving those ends, and the last 28 months have made that abundantly clear. Recall that the administration said in 2009 that the $812 billion dollar stimulus would hold unemployment below eight percent. It has now averaged 9.4 percent a month since that time, including through the administration’s so-called “Summer of Recovery” last year.
How many more months must the American people live with record-high unemployment before the administration recognizes that government spending, onerous regulations, and costly mandates on employers are not the solution but the problem?
The U.S. Treasury has indicated that they will effectively run out of ways to put off raising the debt ceiling without defaulting before the end of the summer. The clock is ticking. Failing to make the tough yet necessary decisions to put this country on a sustainable economic path by cutting spending and reforming broken entitlement programs will result in a far worse outcome than merely a “bump in the road to recovery.”
For nearly 14 million Americans currently out of work and millions more who are struggling to get by as gas and food prices are rising, there is no time like the present to change course and do what is needed to revive our economy, create jobs, and put this country back on track. We must reduce our unsustainable deficit by cutting spending, regulation, taxes, and by reforming our broken entitlement programs.
Kay Bailey Hutchison is the senior U.S. Senator from Texas.