Deal with the devil: Temporary across-the-board tax relief for more endless jobless benefits
I understand many Beltway politicos consider the Obama/GOP tax deal — to be announced at 6:10pm Eastern by the president — to be a “win” for Republicans because the White House has conceded much, including a temporary payroll tax cut holiday of one year that would bring down the workers’ portion of FICA/Social Security taxes by 2 percent from 6.2 to 4.2%.
But outside Washington, many small businesses are getting hammered by the bottomless government subsidies for the unemployed at the expense of struggling employers.
Take my home state of Colorado — where I’m getting inundated with e-mails and first-hand stories from restaurant owners, dentists, and other business people (many of whom employ low-wage workers) grappling with massive UI bills. We’re not alone here in the Rockies. Between 30-40 state unemployment funds are bankrupt or teetering on the edge. And small businesses are paying the price. I’ll be reporting much more on the problem in my syndicated column on Wednesday.
Via the Denver Post:
Businesses are being hit with large premium increases to prop up Colorado’s broke unemployment-insurance fund.
In notices that went out over the past two weeks, some firms are facing rates that have more than quadrupled from last year.
“I had to pick myself up off the floor after I opened the letter,” said Linda Greene, owner of Westminster-based Merry Maids North. Her first-quarter premium for 2011 will be $2,200, compared with $497 a year earlier.
“Money doesn’t just fall out of the sky, so I’m going to have to totally rework my budget and hope for the best,” said Greene, who employs 28 workers.
The Colorado Unemployment Insurance Trust Fund covers the cost of payments to jobless workers. Record numbers of unemployment claims caused the fund to go broke this year, forcing Colorado to borrow, so far, $368.5 million from the U.S. government.
At least 40 other states also are borrowing from the federal government to cover their fund deficits.
Colorado’s unemployment-benefit payments rose from $305 million in 2005 to $1.06 billion in 2009.
…In prior years, firms that never had laid off workers had relatively low premiums.
But for 2011, those businesses are facing big increases along with companies that have histories of layoffs.
Colorado labor department executive director Don Mares said many companies with higher claims histories already are near the state’s maximum rate of 5.4 percent of the first $10,000 a worker earns.
As a result, businesses with low claims histories are being required to pay higher rates to make up the deficit.
“This is a huge inequity,” said Chuck Mock, owner of a Longmont-based software-consulting firm. “If you keep paying into the system and don’t take anything out, that should be a good thing. But not in this case.”
Glad to see GOP Rep. Michele Bachmann expressing reservations about the impending deal. Via The Hill:
A House Tea Party leader said Monday that GOP lawmakers might vote down an extension of tax cuts if it’s tied to an extension in unemployment aid.
Rep. Michele Bachmann (R-Minn.), the chairwoman of the House Tea Party Caucus, said Republicans could balk at voting to extend all the tax cuts for two years if it’s tied to a long-term extension of jobless benefits.
“I don’t know that Republicans would necessarily go along with that vote. That would be a very hard vote to take,” Bachmann said on conservative talker Sean Hannity’s radio show on Monday.
President Obama is said to be amenable to extending all the tax cuts for two years as a concession to Republicans as long as unemployment benefits and certain tax breaks are extended as well.
Republican lawmakers have consistently opposed further extensions of unemployment benefits because, the GOP complained, spending on those benefits was not offset by cuts elsewhere in the budget. Democrats have argued that the spending on jobless benefits is an “emergency,” and doesn’t need to be paid for under “pay-go” rules.
The latest jobless benefits lapsed at the end of November, and securing a new, lengthier extension is one of the top bargaining chips for the White House, especially as both sides hope to close in on a deal.
But conservatives like Bachmann could scuttle the deal if enough defect from the party over spending concerns.
“I think we’re back in a conundrum. I think the compromise would be extending the rates for two years and not permanently, but not tying it to massive spending,” she said. “We cannot add on something like a year of unemployment benefits.”
***
If you are a small business owner with a UI horror story to share, e-mail me at writemalkin@gmail.com or leave comments below.
***
Previous: Well, well, well: Lib columnist discovers unemployed “gaming” jobless benefits
The unemployment benefits debate, Part IV
Paul Krugman, Cynthia Tucker, and the unemployment benefits debate, Pt. III
Sunday morning on the Beltway roundtable circuit
***
The devilish details of the deal, via USAToday:
The outlines of the deal emerged from the White House and Republicans in Congress after Obama met with congressional Democrats late this afternoon. Those Democrats stressed that the deal isn’t final until they run it by their colleagues, probably on Tuesday.
Here are details of the emerging deal:
* Extends unemployment insurance for 13 months. Two million workers in December, and 7 million over the next year, would have lost benefits otherwise.
* Provides a one-year, 2% reduction in employees’ Social Security payroll taxes, lowering the rate from 6.2% to 4.2%, at a cost of $120 billion.
* Keeps the Earned Income Tax Credit and American Opportunity Tax Credit increases from last year’s economic stimulus law, for another $40 billion in tax cuts for families and students.
* Allows business to write off 100% of their capital purchases next year.
* Sets the estate tax at 35% for two years, with a $5 million asset limit that’s higher than last year’s $3.5 million.Republicans in Congress endorsed the tentative deal. Rep. Dave Camp, R-Mich., who will chair the House Ways and Means Committee next year, said it “will allow us to extend all current tax rates and give economic recovery and job creation a chance. The failure to reach and pass an agreement preventing a tax hike would have been devastating for families, especially those who are still looking for work.”
Obama stressed that he didn’t like two elements of the deal — the temporary extension of tax cuts for upper-income Americans, which he said would have cost $700 billion if stretched for the entire next decade, and making the estate tax exemption more generous for the same time period.
Bottom line:
Tax relief = temporary. Jobless benefits = interminable.
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As a small business owner, I’m sick to death of being viewed as a cash cow for government. Why in the hell should I pay for unemployment insurance? Shouldn’t that come from the workers paychecks since they’re the ones who will receive it? Same for payroll taxes and mandatory “contributions” towards health insurance. I’m tired of being my employees mommy and daddy.
It’s just a punt into 2012 for everything, from the Bush income/dividend/cap gain tax rates to the slightly-reduced-from-Clinton’s estate tax rate to the expanded unemployment benefits.
Prediction – this “deal” gets shot down by Pelosi, all the taxes go up on 1/1/2011 to the Clinton rates.
I have no idea how they keep providing benefits for unemployment. They have some talking point that for every dollar they give in unemployment 1.6 dollars goes into the economy. With that math, it seems like we should just all quit and get unemployment and we’d increase GDP by 60%.
I just love how they also say that not raising taxes is ‘spending’. I wish everyone that said we couldn’t afford to not take more money from ‘rich’ people would tell me ONE thing they would CUT since they are so concerned with the deficit.
And for the record, this increase on the ‘richest’ isn’t really a tax increase on the ‘richest’. Rich people don’t have income. People who have income are people who are working to GET rich. This is an INCOME tax.
I assure you when I get 5 mil in assets, I’m checking out and not getting any income. It’ll all be dividends and growth via equities and property. 5 mil @7% dividends means I’ll get 350k/year and I won’t care what the income tax is.
I sold my small business several years ago to a larger concern and it was one of the best decisions I ever made. Here in MD the MUIF (Md Unemp. Ins Fund) jacked their premiums around 1100%.
In MD if you fire someone for cause or they quit they can claim benefits after 10 weeks. If they appeal and win they can collect immediately. The hearings are a joke, because the ex-employee can make any claim against the employer they want without proof and the employer must provide the proof of any claim that may not have even happened.
Any benefits paid out to a former employees are charged against the employer. Even if the former employee leaves and takes another job and gets fired/laid off with in a year the previous employer’s account can be charged.
Any charges increases the employer’s modification rating and therefore can put the employer in a higher taxed bracket.
The whole unemployment process is weighted in favor of the employee and against the employer.
We don’t have to cross the aisle. (I’m so tired of hearing that cliche.)
Obama will have to sign the bill without the unemployment bump. He cannot be seen to raise taxes on the middle class.
Just say no to more unemployment. Why should you be paying their bills anyway?
Thacker, dividends are taxable as ordinary income. Capital gains and municipal interest is taxed at more favorable rates and exempt respectively.
What I don’t understand, is if the social security system is paying out more than taking in already, what benefit is cutting the contribution rate? The only benefit here is that the system will go broke quicker. But the workers will have a couple extra bucks to spend, but what happens when the rate goes back up? Wailing and gnashing of teeth, and then we make it permanent and raise the employers portion to 8.2%?
I didn’t follow up on the whole thing, but does this mean that they are also cutting the employers contribution from 6.2 to 4.2? And is the self employed rate also dropping from 12.4 (6.2 employee/employer portions) to 8.4?
my understanding is dividends are taxed currently at 15% down from 20% when Clinton was in office.
That’s less than half of the 40% the upper INCOME tax rate is.
The point is that dividends aren’t taxed as ordinary income. what do I know about taxes though? I know I pay and pay and pay and pay and get very little for it.
and muni bonds are completely tax free. the point is the same. it’s tax on people trying to get rich, not rich people.
Walterc, ThackerAgency – The taxation of dividends between 2003 and 2010 depends on the source of the dividend (it must be from either a US company or a foreign company that can be readily traded on a US stock exchange) and the amount of time the stock is held (it must be held for at least 60 days of the 121 that brackets the ex-dividend date). If the stock qualifies, the dividend is taxed at the long-term capital gains rate. If not, it’s taxed at the ordinary income rate.
Obama has been in office nearly 2 years and he still sounds like a freshman senator. What a loser.
Vote no on this deal, go for the gusto, make permanent Bush era tax rates, make permanent the 0% death tax.
Shrink government, we’ll do the rest.
I thought that Social Security was going broke? WHY would you lower those taxes and bring in even less to the system? Does that include the employers’ matching part? Eventually that money is going to have to be made up. It really makes no sense to me!
This is outrageous. Why should the Republicans compromise?
This is no longer about unemployment benefits, this is becoming permanent welfare!
It’s not a good deal, but it was probably the best deal the republicans could have gotten and it serves as an excellent preview for what is to come — every deal will come with a poison pill; every deal will come together with endless amounts of last-minute drama. No good legislation can come of this though one hopes some bad legislation/treaties (e.g. START) will be averted. We will continue careening towards disaster, though perhaps careening at a slightly lower speed, if that makes sense.
bho is either really stupid or he wants a total economic collapse. None of this is a plan for recovery. Extending unemployment will be another bail out plan. Cash for couchers. Throwing money at a problem doesn’t solve the problem. The gov has used every crisis to secure the position and power of the elites. Only this time the money has run out. Is the plan to put the small business out of business so that the big businesses can eliminate the competition? If it is not the plan, then the bho administration is massively stupid.
Watching Obama tonight announcing the “compromise” reminded me of a petulant, angry little boy who didn’t get his way. Did any of you see him?? It was actually embarrassing! Compromise is NOT in that man’s vocabulary. And he has no choice! He must be steaming! He expected to float into office with Congress at his beck and call and get everything he wanted. Now he is finding out it isn’t going to be so easy. But my gosh, what a doofus. If he can’t hide his anger better than that, he is going to lose it, big time. I am waiting for his head to explode.
If you didn’t see him, be sure to check it out on the internet. You’ll see what I mean. This is a very dangerous enemy!
Even worse, there are many independent contractors, especially in IT who work as an s-corp and have to pay into the unemployment fund, but don’t get payments from it if they aren’t working because they are self-employed.
I hit that during the dot com bust myself. The first 5 months I was unemployed, I qualified for unemployment. I then got a contract and worked for 10 months after which I didn’t work for 15 months and did not qualify for unemployment.
Although they pretend otherwise, the money from FICA goes into general revenues and is spent along with everything else. A cut in FICA taxes is an income tax cut for low income workers, who don’t pay “real” income taxes.
It looks like they’re aiming at a double benefit for themselves – 1) they get credit for giving their constituencies an income tax cut and 2) they’ll get to blame the Republicans when it reverts in a year or two.
And now comes the word of another bailout. Don’t they ever get enough???
Republicans should seize and expand on Obama’s reduction in the Social Security payroll tax by eliminating the Social Security disability program which would drop 9 million welfare recipients from the Social Security payments and Medicare welfare programs, an immediate reduction in Social Security benefits of 25% and a new cap on Social Security retirees pay of a maximum of $750.00 per month. This will save the Social Security welfare program billions of dollars.
Of course, means testing of new SS welfare recipients so that people that own any assets in excess of $10,000 would get reduced Social
Security welfare payments.
Who would want to hire someone who has been on unemployment for three years?
Some people won’t take jobs because they don’t pay substantially more than what they get in unemployment. They’d rather sit at home than work. Sounds like welfare to me!
That’s all part of their plan.
They are Marxist/Lenninsts, and they seek to destroy the small to medium business owners, and nationalize the big businesses.
I collected unemployment back in 1999 after having been terminated for taking a 5 additional days leave (pre-arranged a year in advance) in order to “fetch my mail-order bride”.
Can i get back on this and sit on the sofa for two years?
FYI. Started a small business and have not worked for anybody else since.
Michelle, I just don’t know about this. I’m here in the Bay Area. I know people who are 50,55,60 years old who have lost good jobs and cannot find anything..nothing..to replace them.
What are they to do? I know two of them well. They can’t even get a job at Walmart. These are not people who don’t want to work. They are embarrassed and depressed about being on the “dole”, but what is the alternative?
I know. I read websites, i.e. Red State, etc, that tell me over and over that these folks should just “get a job”. But there ARE not jobs! Many of these people have kids in college. Many have a spouse that works. Many are unable to pay the usual bills that all of us have. What are they to do?
I have no answer to this. I just don’t know. But you can’t just write these people off as slackers who won’t get off the couch. That isn’t true and we need to find a way to deal with it.
sdillard,
if you are broke and unemployed, San Francisco is the LAST place on the planet you want to be unless you are a gay illegal alien.
The cost of living there is prohibitively high for anyone.
This is the personal responsibility deal that America doesn’t have a taste for anymore. If after 2 years of unemployment benefits, you are still in a position where you might lose your home if you lose your unemployment benefits, you shouldn’t be in the home.
Yeah, the problem is San Francisco. They can’t get a job at Walmart to make ends meet. . . but they should be smart enough to move to an area where maybe they COULD make ends meet.
Again, TWO YEARS on unemployment and suddenly we are ‘kicking people out on the street in their darkest hour’.
TWO YEARS, and likely many have a spouse that works too. How many are double dipping under the table. Extending unemployment is no solution for anything.
It won’t be long until I’m going to need unemployment benefits to pay my tax bill.
Go ahead, Republicans. Cut a deal with Longshanks.
Great, so now that we have a “deal”, does that mean it’s now full steam ahead on the DREAM Act and the repeal of DADT?
(and to think that just today I was remarking to myself how I haven’t seen the BOHICA acronym in quite some time…)
Tickets for that would sell out fast….
Unreal. I had hoped that with Michelle moving to Colorado she would mellow a bit; but oh no! It’s 100% her way or burn down DC. Yep burn the village to save it!
Bitter, bitter, bitter. No doubt you will say you are “looking out for us,” or thinking ahead, or demanding the “best” of our reps, or the lamest comment — “holding their feet to the fire.” You’re not, you just need a fight, even if it’s a straw man.
Obama caves, and you are still pissed off. Unreal. What happened to Conservatives being positive? Oh, yeah, they have blogs now.
Hogwash. If they haven’t found a job in two years, it’s because they’re being too picky, or they’re not looking. They may not be great, but there are jobs out there. But they don’t come knocking on your door.
Why does the GOP think it’s necessary to play “Let’s make a deal?” with the marxist usurper? He’s not even really the President.
He was born a dual citizen, said so on his own website.
Can’t be a natural born citizen and a dual citizen.
Not eligible to be President.
No deals with usurpers, except maybe we go easy on the fraud charges in exchange for his resignation.
happy, I can guarantee you I did not see that clown on t.v. and I never do. I cannot stand the dolt, sight or voice of…I’ll read about what he has said later. I’m honestly repulsed by this dofus. You are right about his attitude, he acts like spoiled lil brat about 3 years old.
I thought the deal was no voting on bills in the senate until the tax issue was settled…so why is unemployment tied to taxes?
The Repukes don’t have to compromise on anything, that’s if they had any back bone.Looks like the RINO’s are back to work, reaching as usual.
From the President’s comments today:
Obama lies again. History shows us otherwise, and only the most left-wing economists, like Paul Krugman, would vouch for such a lie. Most private sector jobs in this country are created by people making more than $200,000 a year. Even the “rich” who don’t own a business of their own often employ domestic help, tax accountants, and others. They also help create jobs by investing in other businesses. It just defies logic for the President to suggest that lowering tax rates for employees will create jobs, but lowering taxes rates for employers will not.
The economy is currently getting worse. Unemployment just went up from 9.6% to 9.8%. So, if Obama wants to “continue the momentum”, he must be planning to continue to make things worse.
He promised to make jobs his number one priority for 2010. Now he’s making the same promise for 2011. Only the insane do the same thing over and over and expect a different result.
Thacker, walterc already told you CORRECTLY that dividends are taxed as ordinary income and you shrugged him off. Now, pull your head out of your ass, then pull out a Form 1040 and go to line 9 — Dividends. Notice that it is a component of Adjusted Gross Income aka Ordinary Income.
I would rather see the 2% drop in social security be permanenet and go into a private fund for each worker and finally put an end to this ridiculous “community” fund.
The President likes to use the phrase “ordinary Americans”. His website calls for “responsible tax cuts for ordinary Americans”. His health care and Wall Street reforms were also intended to benefit “ordinary Americans”. Apparently you’re an ordinary American if you make less than $200,000 a year. That makes me a very, very ordinary American.
I’m not sure what you are if you make more than 200 grand. An extraordinary American? An exceptional American? Probably not. More like an evil, filthy rich American, I suppose. The left loves diversity except when it comes to politics or the size of your wallet.
But why does Obama get to define what an ordinary American is? Isn’t that profiling? If someone used the phrase “ordinary American” to refer to everyone in this country except Muslims (or illegal aliens), Obama would have a conniption fit.
We must screen everyone at airports because the left says it’s wrong to single out terrorists by their profile. We can’t stop Mexicans in Arizona and ask them for ID because that would be profiling. But it’s OK to profile the wealthy and single them out for extra taxes because they belong to a class that the left says is OK to hate and to treat like second-class Americans.
As a matter of fact, you’re the one who’s wrong, and you should have been a little more circumspect in your choice of language. This is correct:
I keep hearing the Sock Puppet and his minions constantly yammering about giving money to the Rich and giving money, in general, to the tax payers. It has always sounded, to me, like these vermin consider any money government money and they want to determine just how much working people pay and may receive back. If this is the case and the Democrats consider money government money and they give us what they wish in the form of Tax withholding, then by extension does that make every single working and tax paying citizen an employee of the Federal Government?
UIB extension is just going to contribute to more difficult economic times. Republicans; grow a set and stop this nonsense! Also anyone not familiar with EITC should check it out because it is just simply wealth redistribution.
I might suggest your error is expecting to see anything resembling logic come from Washington, leave alone the Narcissist in Chief.
Seems like three major falicies afloat here. Barry didn’t cave, GOP did! Extending the present tax levels is NOT a tax cut for business, the rich or anyone. It is status quo and not acceptable in the present economic crisis. Second, when GOP ceded to Barry’s unemployment giveaway – businesses have to pay for it. As michelle illustrates It is a de facto tax increase on business. And lastly – not only does this do absolutely nothing to create jobs – it’s a job killer - saddling business with the tab to pay people to not work prevents them from hiring people! Sheesh. This is not rocket science.
I would add to your comment that wealthy people not only create jobs directly, they purchase goods and services sustaining more jobs.
Here’s my question. How can people argue simultaneously that A) the massive unemployment is the result of government meddling (i.e. job killing) on a scale unprecedented since the New Deal and B) the reason the unemployed are that way is because they won’t get off their lazy butts to find a job?
In other words, either the government is the problem or it isn’t. If it isn’t , maybe we have been far too rough on Obama. Maybe we should ease off. So altogether: “Sorry bro. We’re cool now. The unemployment thing wasn’t your fault. It was because all the unemployed are jerks.”
Just look at this:
Sock Puppet mismanaged the Gulf oil spill deliberately – end result, he got his result of no oil drilling.
Sock Puppet had every tool in the book to stop the Wikileaks, did nothing, and now his minions in the FCC are up to up words of criminal activity regarding the Internet and broadcasting. Why? Too much internet freedom perhaps as well as controlling what you see and hear?
Sock Puppet is trying to stop all oil and gas exploration in the North Slope – see point 1
Is there a pattern here?
beenthere said:
Assuming you are a real person and not a troll, I will answer your question.
Government policies creates/exacerbates the problem – leading to unemployment.
The government then offers an incentive for people to stay unemployed, by continually paying people not to work. Over time, people lose their drive, and become accustomed to a permanent welfare state.
For example, see how various government policies have led to the destruction of the black family.
The big thing that bugs me is the estate tax; it won’t affect me, but how did this massive redistribution of private wealth ever get started?
We steal private wealth from those who have earned it and we fail to ask 40-50% of workers to pay their fair share. No wonder they vote for every free lunch program offered.
Somehow, we were sold on the “progressive” tax method as more fair to those with lower incomes; then we let the lower incomes off the hook entirely.I fail to see how this passes Constitutional muster. I thought we were to be treated by the state equally.
Time for a flat tax and everybody pays or a consumption tax that will hit the lower income folks when they buy that third flat-screen TV. Maybe then they will understand the need to control spending to keep taxes low.
Why do I get the idea that some horrible back room deal has been struck between Obama and the GOP? This just smacks of “Kabuki theater as usual”. Where are the spending cuts? Are we actually going to address the structural problems or just changing the narrative to wind up in the same place again?
I would rather see this deal get killed on principle than keep my current tax rate. We voted to STOP BORROWING first and foremost. Republicans should not be complicit in more schemes involving massive increase in debt on non-investment expenditure. The new congress could always try to retroactively implement the previous tax rates after January.
I think if the citizens accept this and even rejoice about receiving a minuscule bribe in the way of a 2%payroll tax deduction, 2011 will be business as usual in Washington and the country will continue to deteriorate.
I thought Republicans were drawing a line in the sand…cut spending. Am I wrong?
And BTW, they arrested Assange for not wearing a condom. Can’t we get the NYT for something like that too?
Here is the current job chart (h/t to John Derbyshire).
Exactly how would that work? Sell the house they live in? Good luck with that. They’ll take a hell of a loss if they can even pull it off. Then it’s time to get a new place. They’ll have to rent because “unemployment” is probably not stable enough income to buy. How much apartment does unemployment get? Here in FL, it’s a max of $275 a week. Try feeding a family and paying rent on that.
I fully understand the issue with perpetually extending unemployment benefits. That is just a symptom of the bigger problem, the way Obama & co has ruined the economy with no plans to fix it.
John Deaux said:
Me thinks this is just what the Sock Puppet Regime wants – unhappy and afraid makes the masses scream please save us and Sock Puppet and his minions will come to the rescue.
Basically, this is his life in a nutshell.
This sounds like another federal unfunded mandate–and they can’t lend money to states to cover it in perpetuity.
Lets have some brave State AGs file a suit against the feds!
In my opinion, A caused B.
The government created and perpetuated conditions whereby workers are disincented from working.
Deal with the DEVIL is absolutely correct… Three years of unemployment insurance??? Not hardly!!! Three years is no longer unemployment insurance, but now is WELFARE… For the GOP to CAVE, for indeed that is what they did, is not the results I would expect from our “NEW” CONGRESS… If this is the direction we can expect, it will indeed be a rough 2 years until 2012… They should have let O-BOZO’S tax increases take effect in January.. When the so called “MIDDLE CLASS” saw how their taxes went up, and to what degree it affected ALL TAXPAYERS, you would have seen real action, and PRONTO, to reverse the O-BOZO TAX INCREASES… There would have been no extension of unemployment benefits…
Sorry Mark – I find your comment “unreal”
Could you please tell me how this “deal” (regardless of “who caved”) is good for America.
Please understand that the ONLY reason a business hires a new worker is that the benefit of the worker (output) exceeds the cost of the worker. With unlimited unemployment insurance – the costs have just gone up “infinitely”. Only the very most desperate situations will companies hire a new worker.
So once again, please tell me why Michelle’s position is “unreal”.
Because maybe he’s a paid troll?
No, you caved. I don’t understand this insane need to “compromise” with the destruction of our nation.
And by the way, it’s us “bitter clingers” who are the reason why our side has come as far as we have.
Reagan’s quote is trite but true, “Government is not the solution to the problem, government is the problem.” If that is not painfully obvious after dumping $1 trillion plus “stimulus”, and having negative effect on investment and unemployment – then I don’t know what else to say. The solution to unemployment is a favorable business climate. Government can only provide that by offering incentives – not intervention.
No one blames the unemployed, unless they refuse to work. The question isn’t whether extending unemployment benefits is a nice thing for struggling families – The question is how businesses who are already struggling to survive will pay for it, and whether the government already burried in unprecedented debt can pay for anything.
The cause of unemployment is an anemic economy. From a business/finance perspective confidence in the government and economy is at an all time low and risk factors for investment, hiring and expansion are far too high. Saddling business with a massive unemployment comp bill will kill jobs.
I agree gov’t can offer incentives – however, every incentive that gov’t offers, is an attempt to manipulate the free market. When they “incentivize” any particular type of job, they do so at the expense of other “competing” types. When they “incentivize” by giving a tax “break” to one company, they necessarily shift the burden to all the other companies in their jurisdiction (dis-incentivising them). GOVERNMENT IS THE PROBLEM period.
So let me get this straight…
The Republicans got a deficit-increasing goodie, and the democrats got a deficit increasing goodie.
Hmmm… where have I heard about this kind of thing before?
You cannot argue that the Bush tax cuts spurred the economy. The data is the data. But you can also not argue that prior to the Bush tax cuts the United States had a budget surplus. The data is the data.
You also cannot argue that stopping unemployment benefits will crush 2 million people – that’s a fact, in the immediate term. But so is the fact that MOST of these people would find work, just to survive – thus lowering the deficit. Plenty of data on that.
The RIGHT thing to do was exactly opposite. Let the cuts expire – they were sold as temporary, in any case. The economy is already bad, and the budget is a bigger problem.
Let the Unemployment expire.
Slash Obamacare – kill it dead.
Etc.
All we’ve done is kick the can down the road. These tax “non-increases” are doing nothing to stimulate the economy. Unemployment benefits are keeping unemployment artificially high.
And both continue to slap the deficit ever-higher…