The Five Biggest Sacrifices Obama Wants Us To Make 'Right Away'


5. Funding of construction projects: "[W]e'll set up an independent fund to attract private dollars and issue loans based on two criteria: how badly a construction project is needed and how much good it would do for the economy."

We will need more details on this proposal to see the extent of sacrifice that will be required to implement it, but "setting up an independent fund" sounds to me like creating some sort of government bank. This means money spent to pay whoever will run the bank, plus support staff. For how long? And how will the administrators of this fund decide how badly a construction project is needed? My guess is that part of that determination will be based upon whether the government bodies who should be responsible for the repair, maintenance, or improvement projects at issue are broke and unable to pay for the project. This means those state and local government agencies who have managed their funds well are unlikely to have their expenses offset by some of the money from this independent fund, while those state and local governments who have mismanaged their finances will, in effect, be "bailed out."

And of course there's the matter of where the money in this "independent fund" will come from. While Obama called on Congress to "pass this jobs plan right away," he will not even submit his proposal for budget cuts meant to "pay" for it until a week from Monday. All we know, based on Obama's speech last night, is that he plans to close "tax loopholes for oil companies" and eliminate "tax breaks for millionaires and billionaires." Since those, even taken together, cannot come close to providing the $450 billion needed, and because it's doubtful that the super committee will manage to make even the already planned cuts, my guess is that this spending will have to come from a "quantitative expansion," with more inflation as a result. In other words, we will all pay, just as if our taxes were increased.

(Obama's plan to subsidize the hiring of "thousands of teachers in every state" is similar in nature and effect.)

Image of Los Angeles, California, courtesy of Andy Z. / Shutterstock