President Obama's proposed $447 billion jobs plan to revive the US economy can succeed only if the Americans demonstrate an increased propensity to consume subsequently, thus providing the necessary impetus to boost the aggregate demand in the US economy. The multiplier effect of this increase in private consumption with its spill over effects in Investment demand could set the direction for a substantial decline in the unemployment rate which currently is over 9%.
For this the Americans need to feel secure about their jobs in particular and their economy in general. The likely opposition by the Republicans to this proposal, perhaps due to the impending elections next year are likely to heighten the sense of insecurity among the Americans, while the US economy continues to be in tender hooks.
The need of the hour for President Obama is to demonstrate statesmanship by getting the Republicans on board in a spirit of accommodation, and work out a mutually acceptable jobs plan, which would not be altered should there by change of guard at the Whitehouse next year. It would not be surprising if this initiative also helps US regain its topmost credit ratings, downgraded by Standard and Poor recently.
In this context, his dig at the Republican opponents to “stop the political circus and actually do something to help the economy” was unwarranted.
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