In a speech filled with rectitude concerning the need to contain deficits but wisely delaying implementation until 2011 (and tacitly until after recovery is well underway—whenever that will come), President Barack Obama gave every indication in his State of the Union speech that he will remain a Keynesian in practice whatever his rhetoric in an determined effort to restore prosperity.
He emphasized the importance of repairing the economy by acknowledging that “the true engine of job creation in this country will always be America’s businesses.”
He gave a sign of his commitment to priming the economy by proposing a symbolic $30 billion investment in community banks to help small business which are having trouble borrowing from big banks. The funds would come from repayment of TARP loans from the nation’s largest banks.
He proposed a new tax credit for small businesses that hired new workers or raised wages.
He brought both Democrats and Republicans to their feet with: “While we’re at it, let’s also eliminate all capital gains taxes on small business investment; and provide a tax incentive for all businesses, large and small, to invest in new plants and equipment.”
The president advocated heavy investment in a national high-speed rail project and clean energy technology, saying the economy that leads in the latter will lead in the world.
And perhaps most surprising to many and as a sign of the change in national attitude, he proposed a network of new nuclear power plants…and he was applauded by both parties.
“The House has passed a jobs bill that includes some of these steps. As the first order of business this year, I urge the Senate to do the same. People are out of work. They are hurting. They need our help. And I want a jobs bill on my desk without delay.”
On health care, the president opened the door to further negotiations by stating, “Do not walk away from reform. Not now. Not when we are so close. Let us find a way to come together and finish the job for the American people.”
That he did not succumb to demands for deficit reduction had historic significance. Nothing less is at stake than avoiding another full-scale depression, a very tangible risk at this moment in history.
