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Challenges for President-elect Barack Obama
By John L. Murphy

Guyana Journal, December 2008

The United States of America, and indeed the world, have been euphoric over the election of Barack Obama to its highest office. His election has instilled a sense of optimism not only in the U.S., but also around the world. The President-elect will have a very brief moment to savor his victory because he will take the reins of a country that is riddled with many challenges that must be addressed immediately.

One such issue that requires immediate attention is that of the number of Americans who are uninsured. While most major countries in Europe have moved to a universalized healthcare system, the United States has been reluctant to embrace this policy.

There are over 46 million uninsured Americans, which represents about 16 percent of the population who lack health coverage. Many economists and political leaders believe that the increasing number of Americans without health insurance springs from the decline of employer-based insurance. In the last 20 years alone, the percentage of workers with job-based healthcare dropped by about 10 percent.

The cost of healthcare has increased so rapidly that many small businesses, where a third of U.S. workers are employed, are unable to keep up with the rising cost.

And while the U.S. spends the most of any Western country, our health outcomes are not commensurate with the amount paid, as the rates of many preventable diseases are worse in the U.S. than in other industrialized countries.

The lack of health insurance has the potential to negatively affect health outcomes for many Americans. The uninsured receive less prophylactic care and, thus, are diagnosed with diseases at advanced stages when treatment options are reduced, are less effective and the diseases have higher mortality rates.

In addition, the negative health outcomes have the potential to impact the economy because of time lost from work due to illness. The uninsured are forced to postpone necessary medical care that creates higher mortality and billions of dollars lost in productivity.

The country also faces challenges in education. Students are often ill-prepared for the workforce they enter following high school. Many businesses complain that persons who are products of American public school education are severely lacking in essential skills and/or subjects, specifically science, technology, engineering and mathematics (STEM). American businesses say they must bring workers from other countries to meet such scientific needs, as Americans are inadequately prepared in these areas. The result is that American industry is less competitive with other countries, which has major long-term implications for the American economy.

The No Child Left Behind Act, signed in 2002, is in desperate need of revamping. While its goal of improving educational outcomes in the U.S. was noble, it has not lived up to its promise as schools continue to fail.

Another very large and looming threat for the new president will be energy. The country’s current dependence on fossil fuels threatens America’s economic and national security.

The decreasing supply of fossil fuels means that prices will continue to remain high relative to prices of the last decade. The rising price of oil can singularly cause inflation because the high price of oil means higher costs for transportation, food, clothing, etc. which are passed on to consumers.

However, the most pressing matter facing the President-elect is the economic crisis due to the collapse of the housing market. The economy must be Obama’s immediate priority.

The financial sector’s aggressive backing of risky mortgage securities has caused a run on banks. Consequently, many large financial institutions are not well capitalized, cannot meet their financial obligations and have stopped lending. The tightening of the credit market has adversely affected America’s economic engine. Businesses can’t borrow which means that some cannot make payroll and have been forced to lay off workers. Tight credit also means that consumers aren’t able to make purchases, further hurting corporate profits and forcing additional job cuts.

Consequently, there is a large number of unemployed Americans. The U.S. Department of Labor reported recently that initial filings for state jobless claims reached a 16-year high. The U.S. Labor Department indicated that the rate of unemployment was as high as 6.5% in October.

The large number of unemployed persons is not likely to abate in the near future. In fact, most estimates indicate that the jobless rate may increase in the current economic climate as consumers horde cash and employers lay-off workers.

The declining employment figures exacerbate the economic downturn and leads to greater woes in housing, construction and tourism, etc. The staggering economy has forced many states to cut a variety of social services.

The President-elect must plan for a recovery for both Wall Street and ‘Main Street’. He must anchor the financial market and make it possible for consumers and businesses to borrow money again. He must also take steps to stop home foreclosure for average Americans.

Recently, President-elect Barack Obama has crafted an economic recovery plan similar in philosophy to the theories of noted economist, John Maynard Keynes. Obama hopes to save or to create 2.5 million jobs by 2011, by building or augmenting the nation’s infrastructure. His plan involves rebuilding the nation's roads and bridges, and modernizing schools. So far, he appears to be on the right track.

Dr. John L. Murphy is a professor in the Department of Urban Affairs, Social Sciences and Social Work at the University of the District of Columbia, Washington, DC.

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