Monetary Policy By: Ryan Ferguson and Jaye Mitchell

Problems  Unemployment lingering around 10%  Decline of hiring and investment by small businesses  Bad Investments, throwing the government’s money away- 12 trillion dollar debt  Lack of energy efficient and clean energy manufacturing jobs

Obama’s Proposal: Main Elements  Create new jobs instead of save old ones  Tax incentives that encourage small businesses to hire more workers  More spending on infrastructure and other large projects  Rebates for consumers who invest in energy saving improvements for their homes  To use 70 billion dollars of the leftover 200 million dollars from the TARP program

Proposal B  Senator Jack Reed of Rhode Island (D) and Representative Rosa DeLauro (D) proposed bills to expand state existing work-sharing programs  Based on German economic policies that encourage businesses that face a temporary decrease in demand for their products or services to avoid laying off employees by trimming the hours of all employees  Government funded work-sharing program would be cheaper than paying unemployment to those out of work

Other Proposals  Eliminate Job Killing Federal Tax Increases  Reform the unemployment system to help out those out of work find jobs and lower federal payroll taxes to assist in hiring  Expand U.S. Export Jobs

Politics  Trying to please both Republicans and Democrats  Split the difference with what he is doing with the money  Half the money goes to deficit reduction, half goes to job growth  Part supply-side economics (Business Leaders), part Keynesian

Politics (Continued)  Polling Report: Public disapproving of Obama’s handling of economy (54%), public disapproving of Obama’s handling of creating jobs (59%)  Also, it seems that Americans believe that cutting taxes would do more to create jobs than Obama’s job creation program would

Politics (Continued)  CNN Poll: (74%) of the public believes that creating jobs should be the most important to the Obama administration, while (57%) of them want the government to stimulate recovery at the same time  Interest groups want to be given more money to be distributed to workers, or keep more of their money by having lower income tax rates

Policy Window  This policy has a great chance of becoming an actual piece of real policy but it could change quite a bit while in Congress  Bill lacks necessary funds to make much of a difference given the size of the unemployment problem  It does not create jobs directly, relies on people to act on incentives

Policy Window (Continued)  Lawmakers have 200 billion dollars burning a hole in their pocket  Business Leaders expressed their need for a policy like this last month at the White House Jobs Summit  Urgency for this stems from concerns that lost payroll jobs will never return and that temporary, or just-in-time, hiring may become the norm

Policy Window (Continued)  Unemployment in the double digits  Estimates say that if nothing is done, it could take more than a decade to restore jobs lost in the recession  65% of all new jobs in America created by small businesses