My Current Thoughts: The Economy and the 2012 Elections

Obama's prospects for the 2012 elections appear grim when one views the conservative movement in our nation over the past two years. Many Democratic and Independent voters believe that Obama caved in to Republican demands when he signed the Budget Control Act Amendment of 2011 that was passed by both the Senate and the House of Representatives in Aug 2, 2011.

Those who listened to Obama's speech after signing the act realize that he did not cave in to the Republicans. He stated that the nation had avoided a default that would be devastating to our economy. He complemented Congress for putting politics aside and doing what is best for our country. He talked about the deficit reduction included in this act. He once again stated that we can not balance the budget of the backs of those who can least afford it. He said we can not pay the deficit with spending cuts alone. He stated that he would continue fighting for a balanced approach that includes eliminating tax loopholes for the rich and eliminating subsidies for corporations.

There is a valid reason why the job growth has been stymied in our nation. We lost 750,000 jobs during the month Obama took office. As Obama's stimulus package was implemented, the loss in jobs per month decreased and the total number of private sector jobs increased each month. This slow growth of our economy halted with the implementation of the 2011 budget which contained many necessary cuts in spending.

The cuts in spending left the states on their own. In addition to the public sector and private sector job losses at the Federal level, there were significant public sector and private sector job losses at the state level. Although the Federal government stimulus package finances job growth, the actual work is done by private sector industry. The same is true with regard to the states. State funds are used to employ contractors in the private sector. The spending cuts curtailed the rebuilding of our infrastructure which is vital to our economy.

However, the real burden of this chain of events lays on the middle class workers who were placed on unemployment compensation and have to deal with a poor job market and health insurance that will soon disappear if it hasn't already. And I have no doubt that when Congress considers extending unemployment benefits for these workers, the Republicans will once again insult our hard workers with wild unsubstantiated accusations of laziness.

The Republicans are already making the false claim that the stimulus package was a failure. They claim that their economic policies will be successful. I contend that their economic policies will also be stymied by the very same spending cuts that stymied the stimulus package. The reason is that the loss of jobs will increase as more spending cuts are implemented to balance the budget. As I have claimed in my other articles, the 4 trillions dollars in tax cuts in the Ryan budget will be nullified by the massive spending cuts that will affect nearly every state, every town, and every city in our nation. No job growth means no growth in Federal income. Federal income will suffer a double blow because the Federal income will be lower due to the tax cuts.

So what will Obama's campaign home in on? Simple. The destruction of Medicare and Medicaid proposed in Ryan's budget and the fact that the Tea Party was willing to allow a devastating blow to our economy by not raising the debt ceiling in order to attain their ideological goals. Looking at the 2012 elections from this perspective, the Tea Party will be the thorn in the Republican Party's side. The Tea Party will be held accountable for their 'my way or the highway' policy by all moderate Republicans and by all Democrats. This will increase Obama's chances of winning the 2012 elections.