In that context, the plan as it stands is a whimper, if that. More than half consists of extending measures already in place (the payroll tax holiday and unemployment benefits). If those haven’t done much to move the needle in the past two years, it is hard to make an impassioned argument that the third time is a charm. As for teacher layoffs, infrastructure, and some corporate tax breaks to encourage hiring, all of those may be worthy, but their net effect at the level proposed cannot be more than marginal.
We have a problem in the United States, a problem of chronic structural unemployment. And we have the added problem of political cycles of two years. The political cycle demands short-term results, yet the current employment problem cannot be solved that way. The only thing that can be done between now and election time 2012 is put a tad more money in people’s pockets to give the illusion of things getting better. There is no way that millions of new jobs can get created in the coming months, unless Obama and Congress decide to hire workers on government payrolls. Obama can’t do much to create jobs in the coming months, but he could—and this would be radical—admit that and then change the conversation.