It was just four years ago when hundreds of thousands of other progressives, including myself, were pleading with America to restore democratic rule. That was all we needed. The Democrats in charge of this topsy-turvy world would turn right side up. Democrats, who wad railed against the wars in Iraq and Afghanistan, said they hated the war but had to vote for it. They convinced us that all we needed to do was change the man in charge. Vote George Bush out and Barack Obama in. Then, everything would be okay. Well, not so much. Unemployment is hovering at approximately 10%. I’ve been trying to come up with a scenario in which we can get unemployment down to 5% with,in a couple of years, but I just don’t see that happening. We are stuck. We can’t get unemployment benefits renewed because Republicans and some Democrats are dead set against unemployment benefits without offsets. Why is it that tax cuts never need offsets but unemployment benefits do?
From Dean Baker: Unemployment insurance provides the sort of boost to demand that the economy desperately needs. That is why neutral parties such as the congressional budget office or economist Mark Zandi, a top adviser to John McCain’s presidential bid, always list unemployment benefits as one of the best forms of stimulus.
Republicans give two reasons for opposing benefits. First, they claim that benefits discourage people from working. Second, they object that the Democrats’ proposal will add to the national debt.
On the first point there is a considerable amount of economic research. Most indicates that in periods when the economy is operating near its capacity, more generous benefits may modestly increase the unemployment rate. However, they are less likely to have that effect now. The reason is simple: the economy does not have enough jobs. The latest data from the labour department shows that there are five unemployed workers for every job opening.
In this context, unemployment benefits may give some workers the option to remain unemployed longer to find a job that better fits their skills, but they are unlikely to affect the total number of unemployed. In other words, a $300 weekly unemployment cheque may allow an experienced teacher the luxury of looking for another teaching job, rather than being forced to grab a job at Wal-Mart.
However, if the teacher took the job at Wal-Mart, then this would simply displace a recent high-school graduate who has no other job opportunities. That might be a great turn of events in Republican-econ land, but it does not reduce the overall unemployment rate, nor does it benefit the overall economy in any obvious way.
The other argument the Republicans give is that these bills would add to the national debt. For example, the latest extension of unemployment benefits would have added $22bn to the debt by the end of 2011. This means that the debt would be $9,807,000,000 instead of $9,785,000,000 at the end of fiscal 2011, an increase of the debt-to-GDP ratio from 65.3% to 65.4%.
It is possible that Congressional Republicans, who were willing to vote for hundreds of billions of dollars of war expenditures without paying for them, or trillions of dollars of tax cuts without paying for them, are actually concerned about this sort of increase in the national debt. It is possible that this is true, but not very plausible.
Currently, I’m looking for somebody to be in charge of Congress. I’m looking for the Senate to be something other than a wasteland where bills go to die. I’m looking for someone to push the Senate out of its malaise. It is nice to stand in the well of the Senate and make speeches about fiscal responsibility and the recklessness of the Democrats. It’s another thing to propose a real viable solution. To stand around and say that tax cuts are the answer is to be devoid of your senses.
From TPM: “…there’s no evidence whatsoever that the Bush tax cuts actually diminished revenue. They increased revenue, because of the vibrancy of these tax cuts in the economy. So I think what Senator Kyl was expressing was the view of virtually every Republican on that subject.”
The CBO and other budget experts strongly disagree. And Democrats want to preserve the Bush tax cuts for people making less than $200,000-$250,000 a year — but only for them. Allowing them to expire for wealthier people would raise hundreds of billions of dollars over 10 years, which could allow them to offset the spending Republicans currently decry.
However, the GOP’s top budget guy, Sen. Judd Gregg (R-NH), disagrees. He said Kyl’s prescription — offset spending with tax increases or program cuts, but treat tax cuts differently — is exactly right. “It makes a lot of sense, because, you know, when you’re raising taxes you’re taking money out of peoples’ pockets,” said Gregg when asked by TPMDC. “When you’re spending money, you’re spending money that is — it’s not the same thing because it’s growing the government. So I tend to think that tax cuts should not have to be offset.”
This is exactly what I’m talking about. It is impossible to reason with an ideologue. Many in Congress would not know how to formulate a logical argument even if they had a hour-long lesson with Plato. They got elected because they believed in or would tow the party line. I’m not talking about just Republicans. I’m talking about Democrats also. We have to figure out a way to make Congress work for us. We have to make our congressmen resistant to PACs and responsive to us and to logical arguments. How much would you give for our Congressmen and Congresswomen? More than a nickel?