I took a trip to Elkhart, Indiana today. Elkhart is a place that has lost jobs faster than anywhere else in America. In one year, the unemployment rate went from 4.7 per cent to 15.3 per cent. Companies that have sustained this community for years are shedding jobs at an alarming speed, and the people who have lost them have no idea what to do or who to turn to. They can’t pay their bills and they have stopped spending money. And because they have stopped spending money, more businesses have been forced to lay off more workers. In fact, local TV stations have started running public service announcements that tell people where to find food banks, even as the food banks don’t have enough to meet the demand.
As we speak, similar scenes are playing out in cities and towns across America. Last Monday, more than a thousand men and women stood in line for 35 firefighter jobs in Miami. Last month, our economy lost 598,000 jobs, which is nearly the equivalent of losing every single job in the state of Maine. And if there is anyone out there who still doesn’t believe this constitutes a full-blown crisis, I suggest speaking to one of the millions of Americans whose lives have been turned upside down because they don’t know where their next paycheck is coming from.
And that is why the single most important part of this Economic Recovery and Reinvestment Plan is the fact that it will save or create up to 4 million jobs — because that is what America needs most right now.
It is absolutely true that we can’t depend on the government alone to create jobs or economic growth. That is and must be the role of the private sector. But at this particular moment, with the private sector so weakened by recession, the federal government is the only entity left with the resources to jolt our economy back into life. It is only government that can break the vicious cycle where lost jobs lead to people spending less money which leads to even more layoffs. And breaking that cycle is exactly what the plan that is moving through Congress is designed to do.
When passed, this plan will ensure that Americans who have lost their jobs through no fault of their own can receive greater unemployment benefits and continue their healthcare coverage. We will also provide a $2,500 tax credit to folks who are struggling to pay the costs of their college tuition, and $1,000 worth of badly needed tax relief to working and middle-class families. These steps will put more money in the pockets of those Americans who are most likely to spend it, and that will help break the cycle and get our economy moving.
But as we have learned very clearly and conclusively over the last eight years, tax cuts alone can’t solve all of our economic problems — especially tax cuts that are targeted to the wealthiest few Americans. We have tried that strategy time and time again, and it has only helped lead us to the crisis we face right now.
And that is why we have come together around a plan that combines hundreds of billions in tax cuts for the middle class with direct investment in areas like healthcare, energy, education and infrastructure — investments that will save jobs, create new jobs and new businesses, and help our economy grow again, now and in the future.
(Opening statement by US President Barack Obama at a press conference on the US economy, at White House on February 9)