September 14, 2011

What should Obama do?

It is not a surprise to anyone that the US-economy needs to improve. President Obama is doing his best and what he thinks is the best way to solve the problem - but are there other ways as well? Unemployment is still around 9 percent and the debt problem is still here as well.

Morgan Housel 
The US-economy should not be delaying infrastructure repairs when it can borrow money at record lows and construction unemployment is near 20 percent. These repairs have to be done in the future anyway, and the longer they are delayed the more costly they become. This is a good opportunity to spend money and in turn reduce unemployment and lower future deficits.
Morgan Housel wants to see a jobs approach that acknowledges where the great majority of new jobs come from: Entrepreneurs creating new businesses. Here there are two problems:
  • The U.S. Patent Office is holding back "millions" of jobs due to delayed patent approvals 
  • Someone has to stand up and say that future jobs are not going to come from an elderly billionaire - new jobs will come from the 20-year-old Stanford kid creating the future 

Alex Dumortier
Obama should create a second fiscal stimulus program to fund infrastructure projects, while at the same time solve the medium- and long-term problems in the US-economy. The government can earn a positive return on well-chosen infrastructure projects and with the returns try to solve the other problems of the US-economy.
Alex Dumortier also wants to reduce the principal on some of the mortgages that are underwater and where the borrowers have a realistic hope of making the lower payments. Some lenders would be forced to take write-downs on these loans - but it is an acceptable trade-off.

Matt Koppenheffer 
Obama needs to address the fact that a big part of the problem is that a large part of the workers in the US-economy are not changing with the economy. Companies such as Apple and Microsoft says that the US has a much more information- and knowledge-based economy as opposed to a factory- and manufacturing-based economy. Forcing job creation is only a very-short-term fix. If the US wants to be a healthy country, US need to make sure workers have the skills needed to succeed in today's economy.

Ilan Moscovitz 
The reason why the unemployment is so high is:
  1. Consumers are not spending because they still suffer from the housing bubble collapse and feel anxious about their job security, or have have no job at all
  2. Businesses are not hiring because consumers are not spending 
Ilan Moscovitz thinks that the best way to fix the problem is to hire unemployed construction workers to rebuild the US infrastructure. These projects have to be completed within the next few years anyway. It is also important to fund schools and find ways to make college affordable for deserving students. Another way to start the recovery is to reduce the debt burden hanging over consumers by refinancing or reducing principal on mortgages for the people and for businesses with weak sales.

Anders Borg
The US-economy has to increase the taxes and cut the spending

Source: FoolE24 (only available in Swedish)