During the recent online town hall, the President answered several of the top questions submitted and voted upon through our Open for Questions tool by around 100,000 people across the country. Naturally, though, there were a great many questions he could not get to, including many that garnered significant support. Last week we had Kareem Dale, Special Assistant to the President for Disability Policy, address one of the best video questions the President could not get to. Today Jared Bernstein, who facilitated the original event and is the Vice President's Chief Economist and Economic Policy Advisor, answers three more of the top questions on the economy that fell just short of the #1 spots in their categories:
1. "what is the US doing to bring back a solid manufacturing infastructure? the US used to be one of the most self sufficient countries in the world, now we can't get the basics without importing. clothes,steel,cars,toys,food,oil. all imports"
-- Scottg, PA
Thanks, Scott for this important question.
It’s a timely question too, because we’ve been thinking and doing a lot on the issue of manufacturing since we got here, both in terms of the auto sector and infrastructure.
It is obviously the case that we live in a more interdependent world today compared to yesterday. Back in the 1970s, imports were less the 10% of our economy (of gross domestic product, or GDP). Today they’re almost twice that. And, of course, our exports have grown too.
As the President stressed in the online town hall, this expansion of global trade yields great benefits for us, in terms of greater supply of goods and better prices. But—and he stressed this too—there are obviously considerable costs, and they fall disproportionately on folks in certain industries and communities. Our administration is committed to tackling the downsides of this competition by helping people get a leg up in the new economy. This means developing jobs in non-tradable sectors, including health care and the new energy sectors, as well as the skills to compete effectively in the global economy.
You, however, raise another question: Is there a tradeoff between global interdependence and self-sufficiency? I don’t think so. We need to do both: be full participants in the global economy while we, in your words, "bring back a solid manufacturing infrastructure."
That’s why the President has aggressively supported a viable, competitive auto sector. It’s why he and our economic team believe strongly in the creation of green jobs—good jobs that can’t be outsourced.
What exactly are green jobs? See our middle-class taskforce staff report on this (pdf)
for more info, but they are generally jobs that provide products and services that use renewable energy resources, reduce pollution, and conserve energy and natural resources. Investing in the clean energy economy at a time when good jobs at good wages are harder and harder to come by, we must find new, innovative opportunities.
The American Recovery and Reinvestment Act makes unprecedented investments in clean energy and job training, and along with our budget will spur job creation in manufacturing, construction, research, and management, both in the public and private sectors. These are the kinds of jobs that will take us closer to energy independence, and are the kinds of jobs that will rebuild and strengthen our infrastructure in a competitive 21st century economy.
2. "Do you have any plans to reduce military spending in favor of, say, infrastructure? I'm concerned that we're prioritizing our operations in other countries over providing for the basic needs (education, healthcare, etc.) of the people in this one."
-- Phoenix, Santa Cruz, California
This question has good timing, Phoenix, because Defense Secretary Gates just announced our defense budget, and it reflects significant changes that I think you would view favorably in the spirit of your question.
I’ll get to those in a minute, but the larger point is this: we need to devote ample resources toward a strong, efficient military that can continue to protect our nation and our citizens. And just as importantly, we need to make the investments in health care, education, energy, and other areas that will improve the quality of life for our citizens, enable them and their children to realize their potentials, and preserve the environment.
In other words, we need to invest in both and cannot shortchange either.
And I think we’re making great progress in both areas. Regarding the military budget, we’re committed to ending our pursuit of costly systems poorly suited for the threats we face, or turning a blind eye to cost overruns on military contracts. Under Secretary Gates, you will see extremely rigorous fiscal stewardship of military spending that will elevate efficiency without sacrificing safety.
But you will also see, if you look at our budget
that this administration is done kicking the can down the road when it comes to investments in the areas you ask about. We devote deep and lasting resources to health care reform, energy reform, and education.
3. "How does the White House plan to put our country on track to paying down our national debt and ensure the long-term stability of the American dollar?"
-- Nick Troiano, Washington, DC
Nick, thank you for your question.
When we arrived here a few months ago, we inherited some tough challenges: a budget deficit over $1 trillion, an economy in recession, and a financial market that was pretty much frozen.
That meant we had a dual job: we had to quickly move legislation that would meet the economic challenges head on, and do so in the context of a budget that was fiscally responsible.
In fact, our budget not only funds the Recovery Act and other critical investments. It also cuts the deficit in half by the end of President Obama’s first term. It will reduce the deficit by $2 trillion over the next decade.
At the same time, we can’t afford to avoid responsibility for addressing an inefficient healthcare system, an under-funded education system, and a growing dependence on foreign oil. By once and for all addressing these issues, we’ll not only shrink the deficit, but build a strong sustainable 21st century economy.
All of these measures address your dollar stability question. The President has often said that the value of our currency in the international market ultimately reflects the strength of our economy and the soundness of our policies. The fact that the dollar remains the dominant currency amidst the economic turmoil both here and abroad is, in this regard, a real vote of confidence in our economy and our policies. In the same spirit, United States Treasury Bonds continue to be among the safest investments in the world.