President Barack Obama

As I predicted in my book, “Global Economic Forecast 2010-2015: Recession Into Depression,” President Obama’s $787 billion stimulus package has been a conspicuous failure in positively impacting the staggeringly high rate of unemployment in the United States. As is well known, massive job losses occurred in rapid order after the financial calamities of mid and late 2008. I projected in my book that at a vast price in expanded public debt, at best the Obama administration would stabilize unemployment rates at an historically high level.

Now we have the drumbeat of the 2012 presidential campaign sounding louder. Barack Obama is an astute politician, and knows his chances of being reelected to a second term are dismal unless he can tackle, or seem to be tackling America’s jobs crisis. In that connection, Obama has announced he will make a speech to a joint session of Congress on September 7. The speculation is that he will propose tax credits for companies that add workers to their payrolls, and stimulus spending on infrastructure. With the Republicans controlling the House of Representatives, there is no chance he will get any serious legislation passed involving additional spending. At best, the Obama speech that is pending is an electioneering gimmick, and will prove as effective as the administration’s overall economic crisis policy. In the meantime, while the president drafts his speech and the political establishment engages in its usual partisan games, a growing group of leading economists are forecasting a double dip recession in most advanced economies, including the United States. That increasingly likely development will have more impact on the jobs crisis than even one thousand presidential speeches.

President-elect Barack Obama delivered a major speech on January 9 about the economy that presented a tone of gloom, making the case as to why Congress must pass a major economic stimulus package. Obama challenged Congress to work “day and night, on weekends if necessary,” to approve a massive stimulus package, to be funded with borrowed money that taxpayers will have to eventually pay back.

The words that came from Barack Obama spelled out that without a bold and very expensive economic stimulus package, the American economy face dire consequences. Obama warned of a recession that could last for many years, unless the U.S. government stepped in with its checkbook to jumpstart the economy.

While President-elect Obama is wasting no time in pushing Congress for quick action on the economy, there are indications, especially from Republicans but also from some Democrats, of skepticism on some of the Obama proposals. However, there is a consensus that the U.S. economy is in severe crisis, requiring decisive action by Congress.