Symposium 2011: Is more economic stimulus needed and what form must it take to get the economy back on track?

Sydney:  I don’t really know if anything more can be done. The Fed can’t lower interest rates anymore, and They’re not keen to do any more quantitative easing. The Government doesn’t really have the money to throw around either.


There is a lot being said about a rise in jobs growth in the last couple of months and Obama is talking about how the economy is back on track. However, unemployment has actually fallen because less people are actively looking for work. These people haven’t got jobs but they’re not counted in the official unemployment rate. It’s basically smoke and mirrors.


Michigan:  I think I pretty well summed up my thoughts a little earlier.  I will add that we must reward companies that want to build here or expand.  But workers must also wake up to the fact that they cannot be paid $27 per hour plus benefits to turn lug nuts on a wheel.


Cartwright:  We’ve wasted trillions of dollars over the last few years on economic stimulus that has shown no real results.  Economies need to undergo periods of retraction.  It’s unreasonable to expect an economy to continually grow without some periods of retrenchment.  The economy is growing right now, just not very much, so I wouldn’t favor any additional spending in trying to stimulate the economy.  Obviously, if interest rates at historic lows aren’t helping to stimulate the economy, throwing additional money at the problem is unlikely to help.  I think we need to address the issues mentioned in the last question to remove uncertainty for businesses, who are the job creators. The problems that we’re facing are pretty big, and it’s going to take time to work through them.  The housing situation isn’t going to be resolved overnight.  The uncertainty over health care and tax rates can only be addressed by the Congress, and it’s sitting on its hands doing nothing.


Our lack of competitiveness compared to the Chinese is something that will not be resolved, so we need to fundamentally shift our workforce from a manufacturing base to a technology and related services base.  All manufacturing isn’t dead in this country.  We’re stilling going to produce some things here but it’s going to be very small compared to our historic manufacturing capabilities.  If the federal government does want more economic stimulus, I think it would be better to subsidize manufacturing.  For example, there are plenty of textile mills in North Carolina that have closed in the last decade because they couldn’t compete with low wage countries.  Let’s say they can be competitive with wages of two dollars an hour.  Minimum wage is roughly $8, so spend the stimulus money on making up the difference in wages.  Give the manufacturer major tax breaks for creating the jobs and perhaps eliminate the employer payroll tax.  This puts people back to work.  They’re making money and spending money.  They’re paying taxes again, contributing to the Social Security and Medicare trusts.  But to be sure there would have to be major oversight and auditing of these companies, and we couldn’t afford to subsidize them forever, so ultimately we’d be back in the same boat.  It’s a nice thought, but since the end result is the same, I’m not sure it’s worth the effort.  As I said, I don’t think we need any additional stimulus, but the Administration wants to do something to preserve their chances at re-election and that something involves throwing more taxpayer money or borrowed funds at the economy in homes of creating more jobs and creating more growth.  In the end, it’s a waste of money.


RMC:  I see that we’re running a little short on time at this point, so I’ll try to keep my remarks on this brief and not ramble as I have a tendency to do.  I want to make sure the rest of our panel gets to comment on this.


We’ve wasted trillions of dollars on economic stimulus, and we’re still at almost 9% unemployment with the economy going nowhere despite the President’s assertions that the stimulus would do otherwise.  I don’t think any additional stimulus is going to help.  As I mentioned before, infrastructure projects are great but only a small number of the unemployed are really qualified and able to work on these projects.  I think John Huntsman has said it best that we have a crisis of confidence.  Business leaders are faced with massive uncertainty regarding health care, so they’re not hiring.  Demand isn’t all that strong because of the high unemployment rate.  Gas prices are creeping up which places a strain on consumers’ wallets.  I think the best way to get confidence up is to resolve the looming uncertainty regarding health care legislation.  Let’s repeal it and start over with a plan that doesn’t burden business and kill jobs.


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