Today President Obama will be announcing that he wants to use bailout money to fund a new jobs program in order to stem the tide of unemployment rate that is still above 10%. The unemployment rate did decline over the past month, mainly due to people falling off the record. The national unemployment rate is "computed solely from the Current Population Survey (CPS) of about 60,000 households conducted by the Census Bureau. Residents of selected households are interviewed about their work experience. From these responses, the Bureau of Labor Statistics then estimates the size of the labor force and the number of people who are jobless" (http://dli.mt.gov/resources/howrate.asp). While statistics can be altered to establish the view one wants, we'd like to hope that our Government is not doing that as well. One thing the unemployment rate does not take into consideration is if people are working part-time or have taken a full-time temporary job.
That being said, President Obama is want to use the leftover Troubled Asset Relief Program (TARP) funds to go to new construction project and small business loans to assist main street America rebound. "It means that some of that [leftover] money can be devoted to deficit reduction. And the question is: Are there selective approaches that are consistent with the original goals of TARP," said President Obama (http://www.nydailynews.com/news/politics/2009/12/08/2009-12-08_bam_to_toss_tarp_on_jobless_woes.html). The trouble I see in this thought process is twofold. First, President Obama is trading a potential short-term gain (jobs) for long-term debt since new construction jobs will be temporary employment and will not be paid back thus the deficit continues to grow. Secondly, TARP is meant to be used as a slush fund; rather TARP was established to rescue the failing financial sector.
The door was opened though by using TARP funds to bailout the automotive industry. The door needs to be closed on TARP and the money needs to be applied to the deficit. If the president is serious about job growth and sustained job creation then it is time for the Obama Administration to look to nuclear power. Many detractors of nuclear power state it takes 8 to 10 years to get a plant fully functional. All the better I say then. That means that Americans can enjoy 8 to 10 years of constant construction work after which more jobs will be created; jobs that cannot be outsourced. Not only will the building of nuclear power plants bring sustainable, high paying jobs it will assist in the "Green" initiative going on.
As I wrote June 8th in my blog entry "Obama short sighted on summer job program" that "According to the Nuclear Energy Institute (NEI), a nuclear power plant generates "approximately $430 M in sales of goods and services in the local community and nearly $40M in total labor income." Nuclear power plants employ between 400 to 700 permanent jobs while offering, according to NEI, "36 percent more than average salaries in the local area." NEI estimates that during the construction phase a new nuclear power plant will create "1,400 to 1,800" jobs with a peak of 2,400." Does it not make sense to kill two birds with one stone by ramping up the establishment of nuclear power plants? The data provided by the NEI is for just one plant; imagine the job creation if each state started the construction of two or three power plants tomorrow.
Again, my question is why is nuclear energy not being given higher priority when it comes to Obama's energy and job creation policies? Instead Obama wants to tap TARP, which has its own legal issues to start with, and establish a pattern with TARP as a slush fund. Sort of reminds me when Congress decided to bring SSN into the General Fund. President Obama needs to allow the unused TARP funds to go to the deficit and focus on real job creation; nuclear power.
How do you plan on paying for the construction of nuclear power plants?
ReplyDelete"means that Americans can enjoy 8 to 10 years of constant construction work after which more jobs will be created;" Actually, the NEI website says acutal construction takes 4 years. I'm sure the rest is paperwork and site prep.
ReplyDeleteI agree that many, including the NEI, believe actual construction of a nuclear power plant is shorter than what many believe. I am just using the popular number and worst case scenario. As for the funds to purchase these plants, the power companies and private industry that are just waiting for the cloak to be lifted.
ReplyDeleteGovernment funds will not be needed and if they were, the nuclear power plant is a hard asset that would produce revenue to pay back the loan. My guess would be that companies, like Xcel, would issue bonds using the States bond rating to raise the revenue.
I do applaud President Obama for, finally, realizing that in order to really turn the economy around we need jobs. But we do not need jobs here today gone tomorrow. We need sustained jobs as one would get with the construction of nuclear power plants - based on NEI numbers anyway.
Any private company will expect tax credits/benefits and help, is my guess. I'm not saying it's a bad idea, I just think building nuclear plants really has a limited benefit.
ReplyDeleteThere's millions of people out of work, the building of a nuclear plant only helps a small fraction of them. It's not like we're going to be building a 100 new power plants in the next 8-10 years. This creates an isolated benefit to specific populations and I'm not sure I see it benefiting the national economy.
I don't think the focus on creating construction jobs is shortsighted. In theory, that puts people back to work, who have extra money to buy things, thus increasing manufacturing and employing more people. The goal is to cause more spending across several sectors and giving an influx in cash to companies to reinvest.
There is also nothing shortsighted about giving tax breaks to small business to hire more people and buy equipment. That seems like a long term investment, to me.
Okay, let me get this right. You are okay with Federal dollars being spent on temporary infrastructure jobs that will bring in extra money "to buy things, thus increasing manufacturing and employing more people." Really? The NEI estimates that building just one nuclear power plant will generate $430M in sale of goods and service and $40M in income revenue, tell me how how rebuilding bridges, paving roads, or other highway projects will come close?
ReplyDeleteThink of all what will go into building a nuclear power plant and how many different industries it will impact. Plus it will attract future employment, sustained job growth and will spawn up additional small businesses like gas stations, food marts, etc...Again I ask how will rebuilding a bridge or re-paving roads impact America to the degree we need? We do not need temporary employment opportunities.
Nuclear power plants will give us what we need on two fronts - sustained job creation and a renewable green energy source...Don't get me wrong if the numbers are crunched and the infrastruture jobs are sustainable then I will re-assess my position. Right now I do not see it.
Where do you think the 50 billion they want to spend is going to go? It, too, goes to buy supplies and pays salaries that people then use to put food on the table while reducing the need to depend on other sources to do that. It reduces unemployment payments, too. They are just going to be paving random roads. A solid infrastructure leads to further job development, too. Companies factor in the ease of access when building shipping facilities and headquarters.
ReplyDeleteThe money just isn't going to disappear as a handout. Construction impacts multiple industries as well. In fact, many of the same workers would be used on both types of projects. In my opinion, much of the same benefit you speak of is a result of having an updated infrastructure.
The goal isn't to create temporary employment, as I see it. The goal is to have an influx of spending which creates further development down the road. Obama has already said that the government can't create all of the jobs that are needed and the private sector has to. This is a way to jump start it.
Again, how much will the infrastruture project bring to local economies? At least the Nuclear power plant, thanks to the NEI, will create lasting economic impact.
ReplyDeleteSo we shift taxpayer money from unemployment to temporary infrastructure jobs thus landing these same people back on unemployment after the project is complete. What is the fear discussing nuclear power as a viable option to create sustainable jobs and stimulate the economy?
It is refreshing to see Obama use of tax cuts. Something that many in Congress, mainly conservatives, wanted to see take place instead of the Stimulus bill. That being said, can anyone provide data that will show the sustainable impact temporary infrastructure projects have on local economies?
It will bring 50 billion to local communties across the country. Where do you think that money is going? I'm not afraid of the nuclear plant discussion. I do know no community wants one in their area. 430 million is a small fraction compared to 50 billion. It can certainly be a part of the discussion, but building a plant isn't the end all answer. The temporary jobs create permenant jobs through the money being reinvested in other projects by the companies that build the projects and the people who earn the wages. The growth doesn't stop when the project ends. I don't have specific data, I haven't looked either, but I would imagine that the White House otherwise they wouldn't just be throwing these things out there.
ReplyDelete$430M per location a nuclear plant is established is smaller than $50M if we only allowed for one in the entire United States. Now, let's say we add one in every state. That is $21.5B plus establishing 400 to 700 permament jobs per site.
ReplyDeleteI agree that Nuclear Power plants is not an end all or silver bullet but it will have more lasting effects to economic growth and energy benefits than the $50B in infrastructure. This is the same White House that signed the stimulus bill that not one Congress member read nor was it posted on the White House website prior to Obama signing it. Sorry if I seem a little skeptical of the White House logic.