President Barack Obama laid out a series of steps last week that should be at the heart of our continuing efforts to accelerate job growth, rebuild our economy for the long term and bring American families relief during these very difficult times.
These new proposals are an important stepping-stone in our ongoing efforts to fix the economy — but they are only a part of our strategy. There is no one silver bullet or single piece of legislation that will solve our problems. Our nation faces double-digit unemployment. Far too many Americans still are struggling to make ends meet.
But to understand where we need to go, it's important to look back at where we started. On the first days after the president was elected, our economy was rolling toward the edge of a cliff with ever-increasing momentum. Jobs were disappearing; stocks, pensions and home values were plummeting. The possibility of a second Great Depression was frighteningly real.
The president instructed his economic team to take swift action to stem the tide of crisis. And we did.
From shoring up banks so they would lend to businesses and everyday Americans, to helping responsible homeowners stay in their homes, to giving the auto industry a second chance and saving tens of thousands of American jobs in the process, we took unprecedented — and often unpopular — action to stave off a total economic collapse.
We worked with Congress to pass the American Recovery and Reinvestment Act, which has already provided tax relief to millions of small businesses and families, saved more than a million jobs, and begun to lay the foundation for lasting recovery.
We took these steps out of necessity. And today, we are beginning to climb our way back. Our economy is growing for the first time in more than a year, and last month employment was nearly stable and the unemployment rate actually dropped slightly instead of increasing dramatically.
Instead of taxpayer money going to the big banks that helped cause the current crisis, it's coming back from them. Earlier this month we learned that there will be more than $200 billion of savings to the American people through the TARP program — savings that the president has proposed putting to work helping Main Street instead of Wall Street.
But we understand that talking about what we've accomplished may mean little to someone who is still out of a job, with bills piling up and a family to support. These are very difficult times for our nation that require continued bold action, and that's why the president has outlined plans to accelerate private-sector job creation in three key areas.
First, because small businesses are the No. 1 driver of job growth in America, the president's plan encourages investment by small businesses and improves their access to capital by proposing a one-year elimination of the tax on capital gains from new investments in small business stock. This is an idea that has been supported in the past by Republicans as well as Democrats.
We're also calling for the extension of Recovery Act provisions to give small businesses tax incentives to invest in new equipment and other capital goods. We will work with Congress to create a tax cut for small businesses that hire new workers.
And we will eliminate fees and increase loan guarantees for small businesses that borrow through the Small Business Administration.
Christina Romer is the chair of President Barack Obama's Council of Economic Advisers.