Reaction to President Obama's speech: Liberal

There's a reason economists from all angles are encouraging Congress to adopt President Obama's jobs proposal announced Thursday and outlined on our campus Friday: its sound economic policy. Most aspects of his $450 billion proposal will give a big boost to our economy next year, perhaps raising 2012's GDP growth by as much as 2 percent while lowering unemployment by 1 percent.

With aggregate demand in the toilet and production nowhere near maximization, it is the perfect time for the federal government to borrow to spur growth. In real terms, chances are we will make money by borrowing since the yields of treasuries are at record lows. An extension of the payroll tax cut, a keystone of Obama's new plan, is a great way to increase demand in the short-term, since families will have more money left over to spend on goods and services.

Additionally, the infrastructure and education spending Obama calls for is just what we need for the long-term. History has shown that spending on infrastructure, education and research and development promotes consistent, long-term economic growth.

On Thursday night at Congress as well as at Richmond on Friday, Obama advised Congress to end tax breaks and subsidies for oil companies totaling $4 billion. I find it difficult that Republicans continue to coddle an industry that continues to make record profits while paying almost nothing in taxes and devastating our environment. It is ridiculous that Republicans have resisted ending these subsidies (they claim it will cost jobs) since they are supposedly the party of the free market.

Of course, the argument we always hear from the Right is that businesses don't hire because they are unsure what regulations and taxes will be in the future, since Obama isn't always specific in proposals. And you know what, they're right. That is a significant reason unemployment remains persistently high.

What Republicans fail to mention is that much of this uncertainty is their own doing. When Obama challenged Congress to come up with a "grand bargain" in the debt-ceiling debate, Republicans led by Virginia's own Eric Cantor took us to the brink of default.

Well, Republicans, now Obama has proposed specific measures. Measures, in fact, that Republicans have traditionally supported. If the Jobs Bill does not pass, it will be clear that far-right obstructionist politics have nothing to do with our economic well-being and everything to do with making sure Obama is not re-elected.

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President Obama has promised that his proposal be offset by other deficit-cutting measures. Regardless of whether or not this happens, I would make the case his jobs package is a good idea because of the unprecedented borrowing climate the U.S. is in.