Tuesday, September 14, 2010
Intel CEO: Stimulus didn't work
Intel's CEO talks about the Obama Administration's recent stimulus package and how it hasn't helped created and sustain jobs for Americans. Otellini makes some great points in this interview. First, he suggests that Washington needs to stop their stimulus package right now and rethink their strategy. There is no point in wasting government money on something that doesn't seem to be working. he suggests that Obama needs to focus on America's future businesses, mostly technology, and stop investing in things like agriculture, which is a thing of the past. This point ties into his assertion that until Washignton creates circumstances that are favorable to big businesses to produce and manufacture in the United States, such as tax incentives, big business corporations will continue to build their main plants on foreign soil. I think that this is a great idea. Many people argue that the main reason America's economy is falling apart is because no one is investing domestically. If we can flip this around, there will also be a greater incentive for foreign companies to invest in America, further increasing RGDP.
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I think Otellini makes some great points about the allocation of stimulus funds. He is critical of them for targeting short-term projects as opposed to long-term investments for the US economy. Yet, most economists acknowledge that the stimulus, while imperfect, was effective in lessening the impact of the recession and sustaining consumption in the economy. So, while it's easy and, likely, correct to agree with Otellini's assertions that much of the allocation of stimulus funds was misguided, I think it's too much to say that the stimulus was largely a failure.
ReplyDeleteI agree with Otellini's criticism of the way in which the U.S. Government is directing stimulus funds in the economy. Big businesses are continually faced with high corporate taxes in the United States, where as, abroad, the big businesses pay a fraction of the cost in corporate taxes. This discourages domestic investment, and prevents domestic firms from growing and offering more jobs to the workforce. The U.S. Government, like Otellini suggested, should re-evaluate the industries in which tax incentives are provided in order to create and sustain job growth.
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