Tax and Unemployment Agreement Leads to Job Growth

[anthroguy101]

Source: Center for American Progress

Our analysis of the framework tax agreement that President Barack Obama announced yesterday, including additional tax cuts and an extension of unemployment insurance, finds that 2.2 million jobs will be the end result. In this time of economic distress, millions of new jobs are, of course, very welcome. It is, however, unfortunate that these jobs have to come from an agreement that is a balance between large, unneeded, bonus tax breaks for the wealthiest Americans and the needed continuation of unemployment benefits, middle-class tax relief, and additional help for the economy for the rest of us.

While the terms of the deal are understandable given the effective veto power of conservatives, it is unfortunate that policies aimed at the vast majority of Americans and at boosting the economy were held hostage to wasteful tax cuts for the wealthiest 2 percent. But the Obama administration clearly had its eye on job creation in its willingness to accept $133 billion in misallocated bonus tax breaks for the rich in exchange for policies to sustain the economic recovery and help the middle class.

We estimate that the deal as described would save or create 2.2 million jobs, excluding jobs associated with the extension of the broader-based portions of the Bush tax cuts on which all parties were agreed. To give an example of how the $133 billion used for the bonus tax cuts, including estate tax cuts, could have been better used: If it had been instead put to additional payroll tax cuts, 2.7 million jobs would be saved or created. Or alternatively, of course, the deficit could have been $133 billion less. (see table)

Read more: http://www.americanprogress.org/issues/2010/12/tax_agreement.html

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I'm stuck on the fence for this one. I don't know what would be better: extending all tax cuts or increasing taxes on everybody. That's really the only two options we have. If we raise taxes on the middle class, it would be bad for the economy. If we don't raise taxes at all, it's bad for the deficit. Your thoughts?

[DoBotherMe]

1. It would be better if that 2% would move to Abu Dhabi

and see how they like living in the "rich paradise" under the thumb of a heredity ruling class. Blech. Dana ; )

[jtuck004]

2. Well, heck, then they should be able to show us all the millions of jobs

created by these tax cuts from the time they were enacted during the Bush administration. These have been in place for 10 years - we should be absolutely swimming in jobs. And since we get such a great return from unemployment perhaps we should encourage the firing of more people - we could gain even more!

Gosh, with the tax cuts on the wealthy, maybe they will build additions to one of their homes, and hire more housecleaners? And no doubt this will leave a little over for home health care aides for people who spent their retirement trying to save their homes from foreclosure after the investment banks Ponzi Scheme.

This is so much better than a plan that rebuilds our industrial job base and creates a sustainable economy.

[HDPaulG]

3. Why didn't Obama state this?

Obama couldn't simply state this himself?

[county worker]

4. When the talk about job creation you have to ask in what country are the jobs going to be created.

The US Chamber of Commerce said the same thing last week and they talked about the global situation and job growth around the world.

[hugo_from_TN]

5. I hate the 'saved or created' language

It just reeks of BS since you could put any ridiculously high number in and say that jobs were saved.

[roseBudd]

6. I'm a Keysnian on this one, though luxury spending does not create many jobs...

This recession hit everyone in the equity pocket, McMansions may have lost more value than moderately priced homes. Foreclosure rates are high in some of the McMansion suburbs

Long story short

I'm not sneering at the importance of any consumer spending for the demand side, regardless of the multiplier

[groundloop]

7. I've put some thought into this "compromise", it may actually not be that bad

Economists have said for some time that in the short term we need to create jobs, even if the deficit gets bigger. As much as I hate the fact that millionaires are getting more tax breaks, this agreement at least helps stimulate the economy while also keeping unemployment benefits flowing. It also has the added effect of exposing the repubs for what they are after they were willing to screw unemployed Americans if they didn't get tax breaks for millionaires. I hope and pray that Democrats will use this to full advantage in 2 years.

[thereismore]

8. The rich have veto power over the rest of us. Thank you for the crumbs. nt

[tom_paine]

9. The puerile cry of the Jon Stewart Democrats

Jon Stewart Democrats are only good for the same things they were when they were the 1933 German Social Democrats:

Making bad jokes while betraying everything their party ever stood for.

[tom_paine]

11. Correction, making GOOD jokes!

He is one funny motherfucker, for whatever that is worth in the face of growing evil.

Which is nothing.

[jtuck004]

10. The same authors were calling for an expiration 6 mos ago

"More than half of the total benefit from the Bush tax cuts this year alone will accrue solely to the richest 5 percent of Americans while the middle 20 percent of Americans will reap only 7 percent of the benefit."

http://www.americanprogress.org/issues/2010/07/let_cuts_expire.html

Even the additional payroll tax cut is not enough to stimulate more than just a token demand, and that's only if people
ignore their debt and spend it, which didn't happen with the last stimulus.

And with only a year extension of unemployment benefits, if we had to give this to get it this time, what do we have
to give up next year? And the next, and the next? It will be 13 years and 4 months before we see 5-6% unemployment, and
that's if we create 250,000 private sector jobs EVERY month for that entire period, something that has never occurred
in the history of the United States. Ever.

There are a lot of loose figures supporting this, and the wealthy profit the most. Makes me really skeptical.