Last night the president laid out a $447 billion jobs plan which includes continuing the holidays on some existing tax cuts as well as adding some new employer-side cuts. More than half of the plan is focused on tax cuts while another $105 billion goes to infrastructure renovations including school modernization, transportation projects and rehabilitation of vacant properties. 

If you have any exposure at all to the US economy, whether you run a corporation or you are raising money for the school PTA, you have no doubt noticed a certain reservation among people to spend, invest, or give their money. August proved a tough month for the economy. Confidence crushers such as the debt ceiling debate, the unprecedented downgrade of US Treasuries from AAA to AA+ by Standard & Poor’s, a plunging stock market, an earthquake strong enough to suggest attack for many in DC and NY, and an east coast hurricane that literally quieted the “city that never sleeps” all fueled a growing sense of pessimism. 

A friend suggested the other day that “if we are in a recession, at least we can now begin looking forward to the recovery.” The economy has certainly received some serious knocks lately and one could easily make the case that the two-year recovery is in trouble. Supply disruptions from Japan’s earthquake dealt the first blow followed by an equally devastating rise in oil and gasoline prices. Then came the political train wreck over the debt ceiling with questionable warnings of US default coupled with more substantial threat of a downgrade of US debt (S&P has not yet announced their decision). Add Europe’s debt problems and emerging market slowdowns and the global picture gets darker.  

As the clock ticks with little more than a week to go before the August 2 deadline, Democrats and Republicans say they are no closer to a deal to raise the debt limit and cut spending. The latest out is that Obama and House Speaker John Boehner may be close to a deal. Even though details are sketchy, Democrats are critical of it because spending would be immediate and tax increases would come only later, if at all.