Obama's speech eyed: $300 billion job package expected

Business

oi-Monika Nihalani

By Monika Nihalani

Published: Thursday, September 8, 2011, 11:52 [IST]

World is waiting for yet another major speech by America's President Barrack Obama which is scheduled at 7 p.m. EDT (2300 GMT) on Thursday, September 8, which could aid to shape the direction of the markets.

Next on agenda is jobs, how to infuse more jobs in the economy, is the only thing over the mind of United States after August job figures locked at 9.1%. Obama is going to address a 12-member committee, a joint session of Congress, where he would outline the plan major reforms for Federal spending, tax reforms, deficit reduction and tax cuts.

This will be fifth time Obama has spoken to a joint session and no one would deny the fact that he is the gifted rhetorician. So far, things have been messy under his leadership let's hope he create some wonders this evening as the risks this time are as high as the latent for any reward due to little effect on the outcome of his past speeches.

According to the US media reports, Obama plans to propose boosting job growth by injecting more than $300 billion into the economy through tax cuts and infrastructure spending to spur consumer spending.

According to the data released by Congressional Budget office (CBO) on Budget and Economics Outlook in August, unemployment will remain at 8.9% this year, 8.5% in 2012 and would drop to 5.3% in the period between 2013 and 2016 and to 5.2% between 2017 and 2021.

So this suggest, there is not going to have an immediate impact on unemployment figures, but the rate would come down slowly and gradually as the US is also mounted up with huge debt on its head.

US economy grew at 0.4% in first quarter of 2011 and 1% in second quarter of 2011, by keeping interest rates low to near zero till 2013, the CBO projects that GDP will grow by 2.3% this year, the number which looks terribly impracticable viewing the latest job figures.

Well, today Obama's plate will be full with payroll tax cuts, infrastructure spending, tax breaks for businesses, extending unemployment aid and training for the long-term unemployed. But, the thing is that how all these things are going to benefit the economy.

Global investors and economists have kept their fingers crossed over Obama's speech, the man who is filled with big words and small deeds so far.

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