Exit Strategy Takes a Hit as Election Looms

As unemployment grows, the federal debt reaches toward the limit and next year’s election season comes into closer view, the dilemma of creating jobs and uplifting the economy versus what it will cost to do so looms large.

Americans want more jobs and less debt. But that may be impossible. As this Reuter’s story points out, while creating jobs may be an economic and political imperative right now, it costs money, and there is a limit to what even the United States can borrow and spend.

In cases such as this, the easier message typically wins. Our debt is substantial and no one’s happy about it, even if the reasons for its existence – and possibly adding to it – are logical, i.e. many people are still unemployed and need help. Politically, that means candidates who rail against growing national debt will likely succeed. And, as the recent Reuters report suggests, the Obama administration may soon need to shift tack to how it will rein in the record U.S. budget gap.

So that leaves them grappling with the impossible issue of healing the economy and growing jobs without spending money. I agree that the chips are aligning to make 2010 a busy year for the White House and for lawmakers on Capitol Hill. It’s unfortunate that this probably means the much-discussed exit strategy from emergency economic aid programs will have to wait.