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Obama's Plan Must Prevent Leaks, Keep Jobs at Home

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President-elect Barack Obama has promised major action to stimulate jobs, spur economic growth and correct a generally battered system.  The only way to achieve these goals is to ensure that government spending under his direction stays at home and does not flow overseas, according to BusinessWeek.

            The new administration has promised the creation of 2.5 million jobs and the slowing of the endemic outsourcing which has been so destructive to our economy.  Obama has backed a second, larger, economic stimulus package in hopes of propping up consumers.  He has encouraged government spending on major infrastructure projects.  And he has been at the forefront of the movement toward green technology initiatives.

            However, there is still a major remaining problem.  The United States is unproductive and lacks the capacity to manufacture many of the components necessary for his new wave of building.  According to the Depression-era "Buy American Act", federally funded projects must contain a certain proportion of American made components (later laws and alterations change the exact ratio). 

Unfortunately, when it comes to wind and solar power generation, the companies at the forefront of production are largely located overseas (specifically in Germany).  Any energy initiatives will require the creation of a brand-new American manufacturing base.  This will further increase the cost of the program; further imperiling an already indebted government.

The Obama administration will face major political pressure to guarantee that healthcare and energy projects create service and manufacturing jobs in the U.S.  However, the U.S. has been outsourcing these jobs for over a decade and is currently in no position to jump back into the service and manufacturing sector at its previous level.

Another component of the Obama plan is a stimulus package directed at American taxpayers similar to the Economic Stimulus Act of 2008.  This package will be bigger and is hoped to actually yield results – as opposed to the last $100 billion which yielded nothing more than a blip on the economic radar. 

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The problem with this plan – and with the previous stimulus – is that it carries no enforcement which keeps spending in the United States.  With gas, food and commodity prices at an all time high last spring and summer, the first stimulus package was largely sucked up by oil, food and consumer goods producers.  A significant chunk of the $100 billion package went directly overseas and did nothing to help Americans.  Will the same be true of a second effort?

Other countries have been jumping on the "fiscal stimulus" bandwagon in recent weeks, and future foreign stimuli could spur U.S. exports – just as we used the stimulus to buy foreign goods, foreigners use their stimuli to buy our goods.  If this happens, job growth in the U.S. could be driven by other governments.  If it does not happen, job growth overseas could be driven by our government.

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Graduate of The Ohio State University with a Bachelor of Arts in History and Political Science. Student at Georgetown University pursuing a Master of Arts in Global History. Craig Harrington is the host of Wake Up America! which can be found on (more...)

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