Creating Jobs and Stimulating the Economy

The American economy is at a standstill. It was announced last Friday that there was no overall increase in new jobs that were created. We have 9.1% national unemployment with unemployment being even higher in Michigan. So the question is what should be done to get the economy moving again and how can we create jobs and get people back to work.

If you follow this debate, everyone (especially economists) have their own opinion as to what should be done. But it seems to me there a few basic truths that must be addressed in an economic strategy.

The United States has a consumer spending driven economy. Our economy hums along when people - middle class working people - are buying stuff. But when people stop buying our economy stalls and business lay people off. Companies won't even hire people to replace those workers that retire because they aren't selling enough of their product or service.

In other words there is not enough demand by the public to buy consumer products. And why is this? Well its pretty obvious that people who lost their job are not buying anything except the essentials and people who are working are afraid they may lose their job so they are paying down their mortgage and credit card debt.

Meanwhile corporations and business are sitting on $800 billion in cash. They could easily afford to hire more workers and expand their operations. But they don't because it doesn't make good business sense to spend money to expand operations when they can't sell what they are already producing.

This leads us back to what our strategy should be to get people working and start buying again?

Some Republicans and business leaders keep talking about cutting taxes and regulations. But this does nothing to stimulate consumer demand. From their point of view, those ideas may help the business sector but it will do nothing to encourage business to hire more people. Remember the business community is sitting on a pile of cash so cutting taxes isn't needed to generate new funds to reinvest. They already have the money.

The economic strategy that makes the best sense to me is what worked in the 1930's under President Franklin Roosevelt during the Great Depression. The lack of consumer demand was the problem then just like it is today. The strategy that FDR used was to stimulate consumer demand by putting people to work in building our country's infrastructure i.e. our roads and bridges. When the private sector is not hiring even with all the incentives we can provide, then the only solution is to get the Federal Government to hire people and companies to repair our roads, bridges, schools, sewer systems and in this modern era, broadband Internet across the country.

This will put real money in people's pockets and they will be inclined to spend it which will create consumer demand for private sector products. This in turn will encourage business to hire more workers that will put more money in their pockets which will create even more consumer demand and therefore further increase economic activity.

President Obama is scheduled to make a speech Thursday night explaining what his job creation strategy will be. He gave a clue when he spoke at the Labor Day Rally in Detroit when he said he wants the Federal Government to invest money in repairing the country's infrastructure which will help put back to work lots of people in various industries. In another word's he wants to stimulate consumer demand just like President Roosevelt did in the 1930's. This makes sense and I hope we hear more about this Thursday night.

When the private sector won't hire people to increase consumer demand, then the Federal Government must step in to do it. By investing in our country's infrastructure, not only will we be putting people back to work which will jumpstart consumer demand, our infrastructure will be more up to date which will create a stronger foundation for future economic growth.

Finally the End of Osama bin Laden

For the last 10 years we all have been living with Osama bin Laden, who has hovered over all of us for having caused such horrible devistation on 9/11 and not being caught. Now finally it is over and the man is dead and his body dumped into the ocean. You wonder whether this was the way he thought he would go out.

There are so many questions to ask and items to ponder.

How can this man be living for six years in a huge house / compound in a large city and the Paskistan government had no idea that he was there? Its hard to believe. But you have to give a lot of credit to President Obama and the military for pulling off a flawless operation. It was a smart move not to let the Pakistani know about the operation. Who knows what might have happen if they had been tipped in advance.

As a democrat, I can't help but smile with the fact that President Obama finally put an end to Osama bin Laden and not George Bush. I have no doubt that George Bush did his best to try and find bin Laden. But there is a bit of irony that the man that started the Iraq war and used 9/11 as the basis to start that war, was unable to track down bin Laden and it was a Democrat who did the job. This will certainly make the American people realize that Democrats are tough and will take no prisoners when it comes to our enemies that try and do harm to our country.

This will also make President Obama's re-election chances even stronger. Even though the economy is still lagging, which could hurt President Obama, the fact that President Obama brought the mastermind of 9/11 to justice will boster Obama's favorability ratings. The Republican party has a very shallow field of candidates even prior to the death of bin Laden, but now Republicans must realize just how much tougher it will be to beat President Obama with this victory under his belt.

The death of bin Laden will only help a little bit to the families that lost loved ones on 9/11. But it does bring justice and it sends the proper signal to terrorists around the world that the United States will never stop tracking them down, if they commit crimes against America.

Good job President Obama!

Strategy for Rebuilding Michigan's Economy

Governor Snyder's strategy to rebuild Michigan's economy is primarily to cut business taxes. Maybe this isn't surprising because Rick Snyder is a business man. But what is surprising is that this strategy has already been tried in Michigan and it has not been proven successful.

In the last 12 years, state and local taxes have been reduced by over $6 billion annually, moving Michigan to a tax burden below the national average. This obviously has reduced significantly the amount of money that state government spends than in years past. But lower taxes and lower state spending hasn't resulted in economic growth and in fact the opposite has occurred; Michigan has had slower economic growth than the rest of the nation.

So for all the hope that Governor Snyder brought with his election, he is doing exactly what Republicans always advocate as a solution to all problems, cutting taxes on corporations.

But this time its worse, because in order to balance the State budget, which is required by Michigan's Constitution, Snyder is raising taxes on low income people that are working (by eliminating the Earned Income Tax Credit), raising taxes on retirement income (which hurts middle income seniors) and cutting back on the homestead tax credit which will also result in higher taxes on middle income people. The Homestead Property credit helps people whose property tax bills exceed 3.5% of their income. By scaling back this credit, about 311,000 Michigan tax payers will see their taxes go up.

State spending will decrease further under Governor Snyder's budget proposal. One vital area which will see big cuts is funding for K - 12 schools and higher education. This should concern everyone but especially business. Although I understand why business want to see their taxes reduced (nobody likes to pay taxes!), I would also think they would like to have an educated workforce. Ironically, if a business hires people who are not properly educated for the job, then those businesses will have to spend money to train them - an internal company tax!

A better strategy for rebuilding Michigan's economy is to have a fair and reasonable tax system that everybody contributes to and that pays for key state priorities like education that will attract business that want to hire talented educated people.

Many people across the political spectrum believe in this rebuilding strategy than in Governor Snyder's discredited 'warmed over' effort. Hopefully people across Michigan that understand the importance of education will push back on republican legislators and come up with a better and more fair rebuilding strategy.

New Health Care Law Begins to Provide Benefits

The new health care reform law, called the 2010 Patient Protection and Affordable Health Care Act was enacted into law in late March. The new law makes a number of changes that will benefit individuals, families and business. These reforms will help the economy grow and create new jobs. Some of the new changes are:

• Insurance companies can no longer deny coverage if you have a pre-existing condition.
• Insurance companies cannot drop your coverage when you get sick.
• Insurance companies cannot charge you significantly higher premiums based on your health status or gender.
• Young adults from 18 to 26 years can stay on their parent's health insurance policy until age 26.
  
• Seniors get help with the high cost of prescription drugs by eliminating the "donut hole" in Medicare Part D.
  
• Middle class families get financial help to pay for private sector health insurance.
• Medicaid is expanded to provide health coverage to more lower-income families.
  
• A more competitive health insurance market place is created with the establishment of the "exchanges " where insurance companies must list their policies in normal English so people and business can compare prices and benefits before deciding which to purchase.
  
• Small business receive a tax credit of 35% of the cost of premiums to help with the cost of providing insurance to their employees.

Click here to get a better understanding of the new law.

And click here to learn how many people and business in your area (broken down by Congressional District) benefit from this new law.

Some of the benefits of this new law begin this year. Checks of $250 will be sent to seniors beginning June 11, who are in the "donut hole" of Medicare Part D and therefore are paying the full price of their prescription medicine. This $250 is the first step in helping seniors with the high cost of medicine. In 2011, 50 percent of the cost of drugs will be fully paid for by Medicare and by 2020 the "donut hole" will be fully eliminated.

Although the 2010 Patients Protection and Affordable Health Care Act is now law, it is critical that it be properly implemented. Right now the Federal Department of Health & Human Services and the Michigan Department of Community Health are working to implement this new law. I would encourage all those health care activists and any other concerned individuals to stay involved to make sure that individuals, families and business receive all the intended benefits of the new law.

If you have any questions feel free to contact me at Jfreeman13@comcast.net

John

John's Statement on Withdrawing from the Gubernatorial Race

Today, John Freeman, former state representative and current Michigan Director of Health Care for America Now, announced his withdrawal from the gubernatorial race, and issued the following statement:

Having consulted with my family and given it serious reflection, I’ve decided to end my campaign for governor of Michigan. Given our state’s economic woes and my obligations to both my family and job, it became clear that the amount of money required to run a viable campaign was out of reach.

For the many Michiganders who welcomed me into their homes and donated their time, energy and resources to this campaign, I will be forever grateful. For the family and friends who offered me their devotion, love, and support, I am fortunate to have people like you in my life. And for all those who dream of a better future for our state, the work continues.

I will work to build a better Michigan by continuing to strive for comprehensive health care reform, so that Michigan’s businesses can compete around the world, working families can be freed from skyrocketing costs, and nobody will die or be forced out of their home simply because they can’t pay their medical bills.

I will continue fight for progressive ideals, just as I always have, and fully expect to support the Democratic nominee for governor.

On a final note, to my supporters and the people of Michigan, I ask that you continue to strive towards a better future. Robert Kennedy said that often in politics, there’s a danger of feeling futile, like there’s nothing you can do against the enormity of the problems we face. Yet, Kennedy said, “each time a man stands up for an ideal, or acts to improve the lot of others, or strikes out against injustice, he sends forth a tiny ripple of hope. And crossing each other from a million different centers of energy and daring those ripples build a current which can sweep down the mightiest walls...”

Those ripples don’t care if you’re in elected office or just an everyday citizen; we all have the power to stand up for what we believe, and to create those ripples of hope. And eventually, those ripples will build up.

Together, if we all do our part, we can continue to make a wave.

Thank you.