Unemployment Compensation vs. the Bush Tax Cuts

November 20, 2010 at 11:31 am | Posted in Congress, Economy, Politics | 2 Comments
Tags: ,

Thursday evening the House of Representatives defeated a bill that would have extended unemployment benefits. It would have cost $33 billion next year, but would have added thousands of jobs, pumped $1.90 per budget dollar into the economy, and allowed the unemployed to live with at least some dignity while they’re looking for a job. It would have been a net gain for the economy and a humane thing to do.

Many of those who voted against the bill are also opposed to the Democratic plan to let the tax cuts for the very wealthy expire, while keeping the tax cuts for the middle class. That plan would provide $700 billion in revenue that could be used for aid to states, tax credits for job creation—and unemployment compensation. Everybody, including the very wealthy, would still get a tax break, because the first $250,000 of income would be taxed at the lower rate.

By the way, the argument that letting the tax cuts for the very wealthy expire would hurt small businesses is complete and utter nonsense. Less than 2% of small businesses would be subject to the tax increase. More than 98% would continue to get the middle class tax break we now enjoy.

Also nonsense is the argument that ending the tax cuts for the very wealthy would slow economic growth. Tax cuts lower government revenue and raise government debt; higher government debt leads to higher interest rates, which restrain growth.

According to the Congressional Budget Office (CBO), extending the Bush tax cuts would have little effect on the economy, increasing the GDP by only 10 – 40 cents per dollar. The very rich don’t spend as much of their income as lower income people do, so extending the Bush tax cuts only for the wealthiest 2% would be even less stimulative than extending all of the tax cuts. The CBO said that extending tax cuts would have the least value of the eleven economic stimulus policies it studied. A combination of direct aid to states, tax credits for job creation, and extended unemployment compensation would have three times the effect of extending the Bush tax cuts. Extending unemployment compensation alone would add as many as 600,000 jobs and boost economic output by as much as $1.90 per budget dollar. That’s because people will spend the money right away. For necessities. And for Christmas.

Republicans and Blue Dog Democrats who claim to be deficit hawks say we can’t afford to spend $33 billion to help the unemployed, even though it would add hundreds of thousands of jobs and put nearly $2 per budget dollar into our struggling economy. Nor do they want the government to have the $700 billion in extra revenue that would result from ending the Bush tax cuts for the very rich, even though the revenue could be used reduce the deficit or stimulate the economy.

Please write your elected representatives and tell them you want unemployment compensation extended. And tell them you want to let the Bush tax cuts for the very wealthy expire. That will help the economy and reduce the deficit. Pretty good deal, huh?

MSNBC Suspends Keith Olbermann

November 5, 2010 at 6:56 pm | Posted in Media, Peeves | 6 Comments
Tags:

You may have heard that MSNBC has suspended Keith Olbermann without pay, indefinitely. If you haven’t heard about it, you can read about it in the New York Times, here. Those of you who are conservatives will no doubt rejoice; the rest of you will be saddened.

I sent the following comment to MSNBC:

You made a poor decision when you suspended Keith Olbermann. He has never pretended to be objective, and therefore the contributions he made cannot endanger his status as an objective journalist.

I am a constant viewer of his, and I hope you will quickly reverse this decision—and revise your policy to specifically exempt commentators (like Mr. Olbermann) from the prohibition.

Mr. Olbermann is an effective voice for the liberals in this country, at a time when our very political system is in danger. I look forward to seeing him back on the air again very soon.

I hope you will join me by sending your comments to MSNBC. Their online comment form is located here.

It’s Over; the Democrats lost. Why? What’s Next?

November 4, 2010 at 1:48 pm | Posted in Congress, Economy, Obama Administration, Politics, Uncategorized | Leave a comment
Tags:

 

Stop me if you’ve heard this one: “Unprecedented Republican sweep.” OK. Democrats, Progressives, and Liberals lost. The Republicans gained control of the House, and made gains in the Senate.

Why? Let’s look at some numbers. Republican leaders, who surely read the exit polls, say the message is clear: “Repeal healthcare reform!” But according to those exit polls, only 18% say healthcare reform is the top issue. 48% want to repeal it. 47% said keep or expand healthcare. Doesn’t sound like a mandate to me.

House Minority Leader (and presumptive Speaker) John Boehner says the “loud message” from the voters is “Cut spending!” Well, 39% say that cutting the deficit should be Congress’ top priority—but 37% say the government should spend more, to create jobs. 39% to 37%: another non-mandate.

It’s interesting to note that most of the voters in this election cycle were older, blue-collar white men from the South and Midwest. Those areas are not the twinkling stars of our economy, folks, and those voters are suffering.

“It’s the economy, Stupid!” Some voters wrongly blamed the Obama administration for the sullen economy, but more of them blamed Bush II, and even more blamed Wall Street. The last two groups had it right: the economy was sliding into the tank when Obama took office; the TARP package was started under Bush but passed under Obama. (After they helped pass it the Republicans repudiated it.) The Obama administration successfully bailed out the U.S. auto industry (American made cars are selling better than foreign cars and the automakers are healthy again), and bailed out the financial sector as well. (We, the taxpayers are making a profit on the bailouts, by the way.) The Obama administration passed financial regulation and consumer-friendly credit card laws that will help prevent problems in the future. And they did it over the anguished screams of Republicans—and constant Republican obstructionism.

The avalanche of money from the big-money crowd both at home and abroad is another reason the Democrats lost so many seats, but I’ve already commented on that and will do so again elsewhere. In the main it was the poor economy that bashed the Democrats, even though it’s not their fault.

But the Democrats could have done a lot better on November 2. They simply did not get their message across to the voters, or motivate the voters to go to the polls. During the first two years of his administration President Obama should have exercised the charismatic leadership that got him the job. He, Harry Reid, and Nancy Pelosi should have imposed better discipline on the Democrats in the Congress, should have been less anxious to be “bipartisan,” and should have used the bully pulpit to counter Republican arguments.

What’s going to happen in the next two years? I had lunch yesterday with a friend who had the most likely answer I’ve heard: nothing. Nothing will happen. The House will pass legislation that nobody really likes, after endless hours of wrangling, and between endless hours of hearings and endless investigations of Democrats that will turn up virtually nothing. The Senate will sit on any legislation the House manages to pass. If the Congress actually passes something on the Republican agenda (like the repeal of healthcare reform or the privatization of Social Security) Obama will veto it.

Doing nothing puts us on the road to disaster. If you don’t go forward you will go backward. It’s a law of nature as immutable as the law of gravity. The Democrats—from Obama on down—must get their act together. Get your agenda straight, Democrats! Negotiate among yourselves, but come to an agreement—and stick to it! Work together. Don’t bother to try to work with the Republicans: they’ve said time and time again that they won’t compromise. You still have power, Democrats. Use it.

Or the United States of America will end up being a Third World country.

Blog at WordPress.com.
Entries and comments feeds.