RSS Feed MenuMy latest column for The Week discusses the Democrats’ plans for a second stimulus: the $15 billion jobs bill.
The $15-billion bill just passed by the Senate won’t help with the recession; it will arrive far too late. House Democrats are even less charitably disposed toward the Senate than usual these days; they can hardly be expected to rubber stamp the Senate’s work. So how fast could Democrats get a bill to the president for his signature? April? May? How long after that will it take for any appreciable hiring to take place? Six months?
So now we’re into 2011. By then, according to most independent economists, the recovery already visible in today’s macro-statistics will be reaching the private-sector job market. Although the government spending will get underway too late to help with jobs, it will arrive just as we are turning our attention to rising deficits and debt. And thanks to this bill, there will be $15 billion more of it – plus interest — to discuss.
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GOProud // Feb 25, 2010 at 10:48 am
It’s important to keep the right eye on the right ball.
This site has been especially nasty at promoting the notion that the GOP is the Party of No, when it isn’t anymore than the Obami are the party of “We won, we get to decide; no thanks, GOP.” Talk about No as the spirit of bipartisanship, wow.
This site has been especially vigorous in projecting the GOP as intellectually bankrupt and fresh out of ideas, when the exact obverse of that claim is the real truth. On health care reform. On budget reductions. On winning in the WOT. On economic expansion policies, not the usual Democrat placebo. On real regulatory reform –not crony czarism.
Now, DavidFrum is suggesting that the GOP simply say No to the Sen Dem 2nd Spending Spree Jobs Bill because it doesn’t do what it intends to do, it adds substantially to the deficit, and it’s mostly political window-dressing? To wit: ““Let’s not — and say we did.” That piece of adolescent smart-aleckry may be the wisest reply to Democratic plans for a second stimulus — their so-called “jobs bill.””
Hello! How is that different from the Obami Mortgage Rescue efforts? The 1st Stimuli Spending Spree? The TARP-deux expenditures? Even the Afghan Surge-with-Surrender scenario now in play?
None of those did what was advertised. All of them add substantially to the deficit –the deficits of a Deficit Hawk prez, no less. All of them are political window-dressing aimed at cementing political advantage for Democratic constituencies –paybacks for the campaign support, included.
If I were a GOP leader and trying to follow the advice of David Frum and FF with even a little attention to detail and trying to keep the right eye on the right ball, I’d go bonkers with the flip-flop-flip-flop policy pandemonium FF and DF laser out as a “plan” for the GOP to regain credibility and voter trust. Yeow.
sinz54 // Feb 25, 2010 at 10:52 am
The recession is over.
We no longer have consecutive quarters of negative economic growth.
No further stimulus is needed.
balconesfault // Feb 25, 2010 at 11:04 am
I agree that a $100 billion stimulus bill was probably not warranted right now, given the economic growth Sinz mentioned and the legitimate concern over the value of the dollar.
But this bill should properly be referred to as a “jobs bill” – businesses see more activity in the marketplace but they’re understandably reluctant to do a lot of hiring just yet, preferring to load more and more hours onto the workers they retained during the jobs bust over the last months of Bush’s Presidency and the first months of Obama’s.
Hopefully, this bill will incentivize some hiring by enabling those businesses to bring back employees at a lower effective labor cost for a short term. Given the overall value to our federal budget of getting people off unemployment and back into taxpayer mode I’d say the jumpstart could be worth the minimal investment (about 3 Iraq Weeks, my general unit of currency when discussing Republican concerns over spending).
DFL // Feb 25, 2010 at 11:09 am
As a small businessman, I can’t see any business hiring an extra employee because of a $ 1000 tax credit. With salary, health insurance, unemployment insurance and workman’s compensation, personnel are expensive to hire. With federal spending behind most of the recovery, do not expect much extra hiring in the near or even far future. It’s easier and cheaper to work your current employees harder.
Mandos // Feb 25, 2010 at 12:04 pm
We no longer have consecutive quarters of negative economic growth.
No further stimulus is needed.
U6 is still very high, and employment will not recover even to 2007 levels any time soon. Growth has been decoupled from the well-being of most, so I don’t think that this special formal definition of recession is relevant anymore.
franco 2 // Feb 25, 2010 at 12:27 pm
The story you won’t see in FF
“According to the Franklin and Marshall poll, which surveyed 1,143 residents of Pennsylvania, former Representative Pat Toomey–a Republican disciple of Steve Forbes and the Club for Growth–leads Democratic Senator Arlen Specter in the senate race by 44 to 34 percent among likely voters. He leads Democratic Representative Joe Sestak by 38 to 20 percent. If you want to get really worried about Democratic prospects, look at the breakdown. Toomey leads Specter among whites by 53 to 24 percent and among voters from union households by 44 to 41 percent. The only groups among whom Specter does well (besides registered Democrats) are non-whites and people with no religious affiliation. He’s got that vaunted McGovern coalition wrapped up. Sestak, of course, does even worse, but he is still an unknown quantity in Pennsylvania. Specter and Toomey, who has run before, are well known to Pennsylvania voters.
If you really want to get depressed, look at the findings about the Tea Party movement. Sixty-two percent of Pennsylvanians know something about the Tea Party movement. Of these, 85 percent of Republicans, 58 percent of Independents, and 28 percent of Democrats (!) either strongly or somewhat support the movement.
- New Republic
sinz54 // Feb 25, 2010 at 12:40 pm
balconesfault:
A business doesn’t hire a worker unless his net output is likely to exceed his net input (wages, benefits, any tax breaks offered by the Government to hire him).
A $1000 tax break to hire a worker to earn some $40,000 a year (that’s around the median for American workers)?
If that’s all it took, the employer could simply have offered a wage of $39,000 a year and still gotten plenty of applicants for the job, given how high the unemployment rate is.
Kanzeon // Feb 25, 2010 at 12:55 pm
Do you have any credentials to write a column on economics?
EVERY economic forcast I have seen sees unemployment persisting at high levels long after the recession formally ends. That’s why this is a jobs bill, not purely a stimulus bill.
You say:
“So why bother? The answer is that a terrified Democratic Party feels it must do something, anything, to prove its concern for jobs. Shove at congressional Democrats a great pile of papers with dollar signs printed on them, and they’ll pass the thing almost without regard to content. If, as a bonus, those dollars reward cherished Democratic constituencies, all the better. If the money will only reach its target way too late to do anything but inflate the deficit – well, that’ll be a problem for the new Republican majority, won’t it?”
http://www.frumforum.com/a-tardy-jobs-bill-wont-rescue-dems
I used to think that you were different that Glenn Beck or the obstructionist wing of the Republican party, but you’re all cut of the same cloth. I can accept that you could fail to appreciate that SOMEBODY in the political system actually cares about whether people have jobs or not and that they might act, though in your view misguidedly, to mitigate the suffering and increased social problems that will naturally result from long term unemployment. So, I accept that you will see this as 100% political. But, why do you say things that are, well, so stupid? For example:
“…that’ll be a problem for the new Republican majority, won’t it?”
You know as well as anyone that analysts are predicting, by and large, that the Democrats will keep slimmer majorities in both chambers, and I haven’t heard anyone suggest that the Democrats will lose the House. In your cynical view, the bill is solely to prevent a Republican majority. So, if the bill succeeds (and actually whether it succeeds or not), the deficit will be a Democratic problem. But you say that part of the strategy is to leave the Republicans a deficit problem.
And this goes even deeper. You know as well as anyone that the major pieces of the current deficits are caused by TARP and the recession. The CBO projected a deficit of $1.2 trillion before Obama took office. The current deficit projection is $1.4 trillion, I believe. The Republicans are, for political gain, claiming that the entire increase in the deficit is due to Obama. The Republicans don’t want a deficit commission. The Republicans carp about the spending freeze. They aren’t even in favor of pay-go. With this backdrop, you are accusing the Democrats of intentionally passing a deficit turd to the Republicans?
And what is YOUR solution to the jobs problem? Let the market take care of it, apparently. But the universal opinion is that the market won’t take care of it. Screw the 19 year old that is robbed of his future because of the financial meltdown that occured before Obama took office. He can get a job in five years, when the job market improves. Don’t extend his unemployment benefits. And while you’re screwing him, make sure you ridicule anyone who takes a small step towards helping him.
Glenn Beck at CPAC praised Calvin Coolidge, lied about virtually everything and delivered the line: “Go watch the lions eat the weakest.” You guys are twins.
balconesfault // Feb 25, 2010 at 12:58 pm
Sinz – you’re forgetting the payroll tax exemption, which will be worth an additional $2,000+ to the employer who hires someone for that $40,000 job right away.
And your “hiring at a lower wage” argument seems kind of specious … there is a cost of labor curve, and there is a productive value of labor curve … and the intersection dictates what the employee will be paid. Your contention is that the cost of labor curve is already lower, thanks to the jobless rate – which is likely true. But even if it has shifted down $1000 per your example, the new bill will push it downward an additional $3K (more for higher incomes, less for lower).
SpartacusIsNotDead // Feb 25, 2010 at 1:25 pm
Here’s all you need to know to realize Republicans are not capable of, nor interested in, governing. Like Frum, they only care about winning.
http://thinkprogress.org/2010/02/25/alexander-jobs-bill/
Kanzeon // Feb 25, 2010 at 3:22 pm
“If that’s all it took, the employer could simply have offered a wage of $39,000 a year and still gotten plenty of applicants for the job, given how high the unemployment rate is.”
I thought the bill exempted the employer from social security taxes for the year. That, as I understand it, saves about 4% of the cost (after offsetting for the lost ss deduction).
The additional $1000 could up that benefit a touch for the average hire. But that $1000 is about 6% of the annual earnings of an employee making the federal minimum wage.
That 4% to 6% would have some effect, I would think, in a decision as to whether a small to mid-sized business opened a new location or expanded shifts. If someone says that $1,000 isn’t a big deal in a hiring decision, I’d say they haven’t negotiated many pay raises.
GOProud // Feb 25, 2010 at 4:59 pm
It really won’t matter what the economists say about what is or isn’t a recession in 2010 or 2012. Americans will feel like they are Double Dipping into another recession –this one will be Obama’s fault on Obama’s watch because of Obama’s failure in leadership.
All this effort at health care reform will be remembered as an equal failure of leadership and a waste of precious resources that should have been spent on fixing the economy. When things are as bad as they are now for most Americans, they don’t give a rat’s ass about classic definitions… they want things to be better. Period.
1.5% growth off a prior year that witnessed a 6-7-8% contraction is a load of solace to anyone but the spin-masters in the WH Communications Office.