President Obama's jobs program a mixed bag for savings accounts and money market rates

Whatever your politics, you probably have something in common with President Obama: you have an interest in seeing the economy create more jobs.

For anyone whose job security and income is affected by the employment market, stronger job creation would be a big help. For the President, job creation would improve his party's chances in the upcoming mid-term election. For anyone with money in savings accounts, money market accounts or other deposit vehicles, growth in employment may be the key to getting money market rates and other bank rates up from near-zero levels.

So what should you make of the President's latest jobs program?

Jobs program: Good intentions, serious flaws

A jobs program has obvious appeal as a means of addressing what ails this economy. It certainly makes more sense than the Fed's program of driving interest rates down to unnatural levels. Unfortunately, the Obama jobs program also has serious flaws:

• It creates tax breaks by closing tax loopholes for oil companies. As easy as it is to beat up on the oil companies right now (or anytime, for that matter), it's important to remember that those companies are employers too. Taking money out of their pockets could take jobs out of the economy.
• Tax breaks are a form of borrowing against the future. The deficit already threatens to be a drag on future economic growth. Lowering taxes always sounds good, but when the budget is running a deficit, we all pay for it eventually.
• This jobs program may not pass in time -- or at all. We've seen from the stimulus program that it can take a long time before government programs have an impact on jobs. With the passage of this program complicated by the upcoming elections, any near-term impact on the economy is doubtful.

All in all, the jobs program seems well-intentioned but flawed. The economy seems as though it will have plenty of time to try to cure itself before we find out whether this jobs program was a good idea or not.

Showing 1 comment | Add your comment