Key to Economic Recovery: Job Creation

President-elect Obama says he has his team working on a bold plan to create 2.5 million jobs by January 2011.

Somewhere in Washington, there's a team of economic minds sketching out a plan to jumpstart the U.S. economy.  That plan hinges on the creation of jobs, offering lots and lots of employment. How these jobs will be created hasn't been revealed-but hopefully, Obama's team has something more powerful than a set of Obamagic wands to make it happen.

Campaigning for a better future

President-elect Obama's weekly address on November 21 emphasized job creation as the key to economic recovery. He has tasked his economic team to draft a plan to create employment to the tune of 2.5 million jobs by January 2011. While Obama was light on the details of how this would be accomplished, he spoke of infrastructure work and clean energy projects.

Employment via job creation was a core part of Obama's campaign platform, but he appears to have ramped things up a bit. His website, BarackObama.com, defines his intention to "provide $50 billion to jumpstart the economy and prevent 1 million people from losing their jobs." Of this $50 billion, half was to be directed towards state-managed educational and housing projects, while the other half was to be deployed in road maintenance and school modernizations.

Raising the bar as conditions worsen

Back then, the goal was 1 million jobs. Now it's 2.5 million. The difference shows that Obama is highly informed about what's happening around the country. Roughly 1.2 million jobs have been lost in 2008, the financial markets continue their unprecedented volatility, and the housing market has shown no signs of recovery.  The President-elect noted all of these circumstances in his weekly address. But he also mentioned another factor that sheds more light on his vision going forward: the risk of deflation.

Deflation can ravage an economy, as it did during the Great Depression. In the current era, lawmakers have already demonstrated their belief that deficit spending is a preferred means of countering a deflationary trend. Obama's deflation reference, taken in combination with his call for bold action, appears to lay the groundwork for a vastly expanded government going forward-a government that would borrow money to create jobs and hope to pay back the tab later.

Forging ahead with Democratic support

Normally, any initiative that fundamentally expands the government's presence would spark a huge debate between proponents of big government and its opponents. But since the Democrats control both houses of Congress, this debate may have little impact on the shape of future legislation. Even so, Obama still ended his address with an eloquent call for bipartisan support.

Meanwhile, the American people are waiting for employment, just as they've been waiting for a solution to the housing crisis.  Those who are out of work probably don't care whether Obama fulfills his promises with big government, a team of brainy advisors, or a few spells of Obamagic-just as long as he somehow gets it done.