U.S. policy needs a complete overhaul to save the economy from a second Great Recession, but instead President Obama promises more of the same policies that have failed—stimulus spending, higher taxes and onerous, ineffective business regulations and health care costs.

Domestic demand for what U.S. workers and businesses can make remains inadequate to ensure full employment. Americans are spending more these days, but too many of those dollars go abroad to purchase more expensive imported oil and Chinese consumer goods that do not return to purchase U.S. exports and create jobs.

Instead of addressing these problems, the president proposes a package that will do little to boost domestic demand, and that will permanently hamstring the economy with higher taxes and mindless bureaucracy.

The president proposes spending an additional $140 billion on roads, schools and other infrastructure, but wants Congress to pay for this with cuts in spending on Medicare, Medicaid and other programs. How will adding construction workers to the national payroll, while laying off health care workers boost employment?

The proposed privately funded infrastructure bank is a great idea; but it will take some time to get going, and it will lend money to state and local governments that must be repaid.

Many jurisdictions are already at the limits of their borrowing capacity. While the bank would alter state and local priorities in favor of spending on needed public investments—instead of more local officials to harass homeowners and businesses—the near term impact on domestic spending and employment would not be large.

Much of the payroll tax holiday for workers merely extends a benefit due to expire at the end of this year. And the president proposed to pay for these temporary tax breaks with permanent increases in taxes on high income individuals. The net effect on domestic spending is likely to be negative.

Similarly, temporary payroll tax cuts for employers won’t create much new business investment and hiring if paid for by higher business taxes overall, as the president proposes, by boosting overall corporate taxes through a complex scheme of eliminating tax incentives to invest a lot and lowering rates just a bit.

Sound like a Ponzi scheme? It is and worse.

The president offers lot of high sounding words about freeing business from unnecessary regulation—but what is unnecessary is in the eye of the beholder. In the next breath he panders to the left and Ivy League advocates of a state managed economy with promises not to relent on protecting the environment and unions.

ObamaCare is not lowering health care costs, which are 50 percent higher than in Germany’s private system. Rather, it is pushing up prices businesses and individuals pay for coverage and in copayments. Yet the president is unmoved in his support of this jobs killing law.

On the more fundamental structural problems the president is absent without leave.

Restricting U.S. oil and gas development only shifts the management of environmental risks offshore.

Failing to confront Chinese mercantilism, and instead focusing on free trade agreements with Central America and Korea, will help workers little.

Free trade agreements increase imports that destroy jobs, as well as boost exports that create jobs—net gains in demand and employment will be modest at best and far into the future. The damage done to the U.S. economy by Chinese protectionism is real, present and substantial.

The president just does not want to do the heavy lifting--develop domestic energy, fix trade with China, lighten business regulation, and genuinely tackle the most expensive health care system in the world with cost cutting reforms.

Peter Morici is a professor at the Smith School of Business, University of Maryland School, and former chief economist at the U.S. International Trade Commission. Follow him on Twitter pmorici1.

Peter Morici served as Chief Economist at the U.S. International Trade Commission from 1993 to 1995. He is an economist and professor at the Smith School of Business, University of Maryland, and a widely published columnist. He is the five time winner of the MarketWatch best forecaster award. Follow him on Twitter @PMorici1.