Houston we have a problem -- unemployment exceeds 10%
Maybe if Congress spends another $787 billion in the name of job creation, we can get the unemployment rate to 11 or 12%.
We've now had two very concrete examples of "stimulus" packages that didn't work - President Bush's $160 billion effort in February 2008 and President Obama's "super-size" version a year later. Neither has made the smallest dent in unemployment.
Not only did the unemployment numbers get worse, but the hourly hours worked stayed the same. So millions of Americans will have to start becoming full-time workers first before any new bodies get hired.
The White House says that the stimulus created as many as 1 million jobs. No one doubted that this massive spending would create a few and "save" a few jobs. But every new dollar in government spending is either taxed or borrowed from the private sector, which might have put it to better use.
If the government takes $1 from Paul, who might have invested it in a new business, and gives it to Peter, who buys a new lawn mower, the government records it as a net gain for economic growth via consumption. But the economy is hardly more productive as a result.
The lesson here is for both parties. Bush's cave-in to Democrats meant there was no debate in Washington over policies that might have produced a much better stimulus earlier on in the recession. A stimulus needs to be immediate, permanent, and at the margin of the next dollar earned.
Prime example that we haven't learned our lesson is the extension of home buyer credits and the additional unemployment benefits. Most home buyers would have bought a home anyways. And most unemployed (including myself) received plenty of weeks of unemployment benefits that helped us get back on our feet as we found a new job.
The best thing people can do right now is to stop trying to ram through a health-care bill that slaps a 5.4% tax "surcharge" on anyone making more than $500,000 a year. The Joint Tax Committee says that one-third of this tax increase will be paid by small business job creators who file their taxes under the individual income tax code. With north of 10% unemployment, we shouldn't be slamming small businesses.
Once Congress gets out of the way, the job market will have a chance to recover on its own.
We've now had two very concrete examples of "stimulus" packages that didn't work - President Bush's $160 billion effort in February 2008 and President Obama's "super-size" version a year later. Neither has made the smallest dent in unemployment.
Not only did the unemployment numbers get worse, but the hourly hours worked stayed the same. So millions of Americans will have to start becoming full-time workers first before any new bodies get hired.
The White House says that the stimulus created as many as 1 million jobs. No one doubted that this massive spending would create a few and "save" a few jobs. But every new dollar in government spending is either taxed or borrowed from the private sector, which might have put it to better use.
If the government takes $1 from Paul, who might have invested it in a new business, and gives it to Peter, who buys a new lawn mower, the government records it as a net gain for economic growth via consumption. But the economy is hardly more productive as a result.
The lesson here is for both parties. Bush's cave-in to Democrats meant there was no debate in Washington over policies that might have produced a much better stimulus earlier on in the recession. A stimulus needs to be immediate, permanent, and at the margin of the next dollar earned.
Prime example that we haven't learned our lesson is the extension of home buyer credits and the additional unemployment benefits. Most home buyers would have bought a home anyways. And most unemployed (including myself) received plenty of weeks of unemployment benefits that helped us get back on our feet as we found a new job.
The best thing people can do right now is to stop trying to ram through a health-care bill that slaps a 5.4% tax "surcharge" on anyone making more than $500,000 a year. The Joint Tax Committee says that one-third of this tax increase will be paid by small business job creators who file their taxes under the individual income tax code. With north of 10% unemployment, we shouldn't be slamming small businesses.
Once Congress gets out of the way, the job market will have a chance to recover on its own.
