President Obama unveiled his eagerly awaited jobs plan recently, which might bring fresh hope and confidence to the economy and to the lives of people in America. The plan is mix of deliberate adjustment of expenditure and taxation, with a purpose to assist the ailing U.S. out of the recovery bed.

The President revealed what many have seen as a second stimulus package to lift the economy from recession. He proposed mild ramifications with fiscal tools, deductions in payroll taxes and extending the spendings on infrastructure and other alternatives to get the economy running again.

In order to increase activity, a mix of tax cuts and spendings on schools and roads, aid to teachers and assistance to the unemployed was announced. The total cost of the plan is $447 billion of which $253 billion will go to tax-cuts and $194 to new spendings. A select part of the bill could become law and provide a measure of support for the economy.

The best component to win the congress’ approval is the payroll tax cuts. Reduction in tax rates will give more purchasing power to the consumer, which eventually should push demands upwards. Currently employees normally pay 6 percent if their income in tax, but in the future, they may become liable to pay only 4.2 percent. A reduction of 2 percent.

Fundamentally, the Obama administration wants to put more people to work and increase spending so that a weakened demand may get strengthened and help bring back certainty in economic activity.

The $447 billion cost program is nearly half of the stimulus package announced by the President in 2009, and reflects the severity of the economic crisis. When the economy is weak, governments will often launch ambitious analysis to find out the root cause of the problem, and upon successfully finding it, they design policy to curb or mitigate its impact on the economy.

As in this case, Obama proposed a National Infrastructure bank which would cost $10 billion to establish, but which would pay for new public construction projects like local roads, bridges and mass transit systems.

Furthermore, the president outlined new spending program for school modernization (at least 35,000 public schools) with total spending of $25 billion. In an effort to provide benefits to jobless people, the plan sets aside $62 billion for unemployment insurance to continue supporting the jobless.

Many economists say that the American government must put billions of dollars into the economy to keep it from sinking into recession, but no proposal is ever be without criticism. Nigel Gault, Chief Economist with HIS Global Insight said “If you give somebody a tax cut and they just save it, then there no jobs created”.
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Presidential hopeful Mitt Romney has launched his own jobs plan ahead of the president’s address to the nation on Thursday. On Tuesday, Romney detailed his 59 specific proposals to improve the nation’s economy and create jobs.

“At best, government can provide a framework in which economic growth can occur. All too often, however, government gets in the way,” Romney wrote in an opinion piece in USA Today that previewed his 160-page plan. “The past three years of unparalleled government expansion have retaught that lesson all too well.”

Romney’s plan, no surprise, includes lowering the tax rate for corporations to encourage more corporations to keep profits in the U.S. This comes just weeks after Romney stated that “corporations are people.” Romney also proposes to eliminate tax on interests, capital gains and dividends. Romney’s campaign stated that these proposals specifically target middle class Americans, however few middle class Americans pay those types of taxes.

Romney criticized Obama for expanding federal regulations. He announced a proposal to ensure that new regulations at government agencies do not cost money. If a new set of rules raises costs for businesses, Romney would require that a different set of regulations be eliminated.

“I have spent most of my career in the private sector starting new businesses and turning around ailing ones. Unlike career politicians who’ve never met a payroll, I know why jobs come and go,” Romney wrote in USA Today, again a jab at Texas Gov. Rick Perry, who has held public office since he was elected as a Texas state representative in 1985.

Democrats criticized Romney’s plan, even before he rolled it out. Brad Woodhouse, a spokesman for the Democratic Party, said: “Mitt Romney has promised an economic plan that is bold and sweeping. But if the past months have shown anything, what Americans are really likely to get is more of the same tired rhetoric and worn out ideas which have failed America in the past.”

Although there is nothing new or different in this plan (lower taxes, reduce regulations), at least Romney is proposing something. The Republican Party in general has not offered any real solutions to the economy. The Republicans are known as the “Party of No” for a reason.

They are quick to criticize the president, congress and everyone else without suggesting any alternatives. Of course, the hocus pocus magic of lowering taxes and reducing regulations does not help the economy (see: George W. Bush’s 8 years) but  Mittens is trying to set himself apart in the crowded GOP field.

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