Unemployment numbers keep getting worse, not better according to this report from McClatchy:
First-time filings for unemployment benefits rose last week by 12,000, reaching 500,000 for the week, the highest level since last November. Economists had expected the claims to drop. […]
Obama proposes making the Bush tax cuts permanent for individuals who earn less than $200,000 a year and couples who make less than $250,000. He’d let the tax reductions expire for those who earn more than that.
Republicans — and some Democrats — want to make all the tax cuts permanent or at least to extend them as long as the economy remains fragile. They fear that a tax increase would hurt recovery.
Indeed, the CBO said the economy and jobs outlook would be helped under one scenario, in which most tax reductions_ except the lower rates for the wealthy — were extended and federal spending restrained.
Well, we all know that neither of those is going to happen. Republicans won’t abandon their wealthiest donors to help out everyone else. The GOP will continue to block extension of tax cuts for the middle class unless the rich get theirs too.
So either all the Bush tax cuts will expire unless the Democrats cave and extend all of them. Of course extending tax cuts on the wealthiest Americans (those with incomes in excess of $200,000 for individuals or $250,000 for families) will only increase future deficits more, but that won’t stop Republicans from claiming the deficit is all the fault of Democrats and “entitlement programs” (you know, Social Security and Medicare which are subject to a separate, regressive tax).
As for spending, thanks in large part to the costs of our wars in Afghanistan and Iraq, deficits will remain high (and no, our involvement in Iraq isn’t over when you still have 50,000 US troops there). The companies that make bullets, bombs and drones and electrocute soldier in showers (Hi KBR!) will continue to do well, but everyone else will suffer from lack of spending.
As this chart from Gallup shows consumer spending is down from last year at this time. Without some easing of credit for small business or government investment in rebuilding and modernizing our infrastructure (updating the electrical grid so that it loses less electricity, spending on or tax credits for new green technologies like wind and solar, fixing bridges and roads, investing in education, transportation, etc.) new jobs will be hard to come by.
If I were running the Democratic campaigns for the Fall I would be emphasizing that we are falling behind other developed nations because we refuse to INVEST in the infrastructure and new technologies that will secure more jobs now and better paying jobs in the future.
However, it seems the Dems are falling into the GOP trap of having the debate over the Bush tax cuts for the rich and corporate welfare that allows jobs to be outsourced overseas which we know failed to generate job growth in the past according to that commie rag The Wall Street Journal.
President George W. Bush entered office in 2001 just as a recession was starting, and is preparing to leave in the middle of a long one. That’s almost 22 months of recession during his 96 months in office.
His job-creation record won’t look much better. The Bush administration created about three million jobs (net) over its eight years, a fraction of the 23 million jobs created under President Bill Clinton’s administration and only slightly better than President George H.W. Bush did in his four years in office. […]
Because the size of the economy and labor force varies, we also calculate in percentage terms how much the total payroll count expanded under each president. The current President Bush, once taking account how long he’s been in office, shows the worst track record for job creation since the government began keeping records.
Three million piddling jobs created in 8 years? Remember, this came during a time when Bush increased government spending to private companies and to pay for our massive wars in the Middle East. It was the worst job creation during an economic recovery (from the recession created after the Tech stock bubble burst in 2000) ever. So why on God’s Green Earth would any Democrat talk about tax cuts as being the panacea to our nation’s job woes?
Every time a Republican says tax cuts create jobs a Democrat should be waving that Wall Street Journal article in his or her face. Every time they say we need to extend the Bush tax cuts for the wealthiest Americans we should be saying that isn’t going to create jobs for the unemployed because the record proves it.
Bush’s job creation didn’t even keep up with the rise in the workforce population.
When George W. Bush came into office in 2001, there were 215 million Americans who might want work. By the end of his administration, in 2008, the population had grown again, and there were 234 million Americans suitable for America’s labor force. The number of people who might want jobs had grown by another 19 million people.
Unfortunately, 19 million jobs were not created during the Bush years. Instead, according to the Bureau of Labor Statistics, a net gain of only 2 million jobs were created. This means that during the eight years of the Bush administration, only a year’s worth of new jobs were created.
And that means that by the time George W. Bush left office, the United States was seven years behind in the number of jobs it needed to keep its citizens working.
In addition, during the halcycon years of the Bush tax cuts, 8.3 MILLION more people fell below the poverty line during his eight years. Median incomes fell from $52,500 at the end of 2000 (Clinton’s last year)to an inflation adjusted $50,303 in 2008 That’s a drop of 4.2 per cent.
As Ronald Brownstein, the political director of Atlantic Media, commented on the 2009 Census Bureau report:
On every major measurement, the Census Bureau report shows that the country lost ground during Bush’s two terms. While Bush was in office, the median household income declined, poverty increased, childhood poverty increased even more, and the number of Americans without health insurance spiked. By contrast, the country’s condition improved on each of those measures during Bill Clinton’s two terms, often substantially.
So who benefited from the tax cuts? Not people who needed jobs, not most workers, not poor people. No, the people who most benefited from the tax cuts were MILLIONAIRES and BILLIONAIRES:
Families earning more than $1 million a year saw their federal tax rates drop more sharply than any group in the country as a result of President Bush’s tax cuts, according to a new Congressional study.
The study, by the nonpartisan Congressional Budget Office, also shows that tax rates for middle-income earners edged up in 2004, the most recent year for which data was available, while rates for people at the very top continued to decline.
Based on an exhaustive analysis of tax records and census data, the study reinforced the sense that while Mr. Bush’s tax cuts reduced rates for people at every income level, they offered the biggest benefits by far to people at the very top — especially the top 1 percent of income earners.
So why are Democrats still talking about tax cuts? Eight years of tax cuts and Republican mismanagement cost us jobs, made health care more expensive or unavailable for more Americans, substantially increased poverty and lowered incomes for most Americans. That’s the message Democrats should be speaking out about loudly and clearly at every campaign stop and in every speech and in every ad they run this year.
But will they?
What is the CBO smoking? More specifically, what is Douglas Elmendorf smoking?
What were the scenarios they evaluated?
Were they as one-sided as the analysis of healthcare reform in which they never scored the single-payer bill?
The federal bond rate is less than 3%, and he’s worried about the deficit. How about borrowing a trillion at that rate to spend on deferred infrastructure maintenance projects. And in 2011, another trillion at what, maybe 5%, for the same purpose. Allow the Bush tax cuts to expire. Middle-class tax cuts are not going to goose consumer spending nor will they amount to much if folks don’t have middle-class incomes.
It looks like they are bending themselves into a policy pretzel to try to goose consumer spending, since businesses are not spending, instead of increasing government spending.
A clear case of politics trumping economic good sense.
Well I agree that we need stimulus spending. I’d also like to see us withdraw from Afghanistan or significantly scale back our effort there, cut unnecessary defense spending (talk about your waste!) etc.
I’m not defending the CBO, but I do believe preserving the middle class tax breaks is important if only to help –let me say it — ME and many like me with our heads barely above water. The CBO did not recommend preserving the tax cuts for people making over $200,000 (idv.) or $250,000 (fam.). And that is precisely Obama and
themost Democrats’ position. But do we need more stimulus spending on stuff that will create jobs? Yes, a thousand times yes.More specifically, what is Douglas Elmendorf smoking?
You do realize that Elmendorf, like Peter Orzag(is he gone yet?), is a disciple of Pete Peterson, right?
Exactly. Everyone knows things are a mess but perhaps just don’t know how messed up it is. Or that it never really got better after the dotbomb. At least not for most of us. Going back should not only be seen as a bad idea but actually stupid and more so SCARY because as fast and as bad as things fell off in 2008 that is only a small indicator of how bad the fundamentals are.
What you write, Steven, makes eminent common sense. What disturbs me is why the Democratic Party doesn’t pick up on this and whale the hell out of the Republican position with its obvious ties to the wealthy. Is is because the Democrats are also becoming tied to the wealthy? If this isn’t the reason, then, I guess, I am really out of touch. It seems like such a simple manner to connect the GOP with its massive resistance to doing anything constructive about bringing down those unemployment rates. Jobs are of central importance. So provide them.
I’d say the answer to “why” is simply that Barack Obama is a poor politician.
Or too entrenched in old style thinking.
I see that as the same thing, actually.
But … but .. but . I had everyone telling me that he’s a master politico .. he’s playing 11 dimensional chess that’s over everyone’s head
The tax cuts for middle and lower income people will stimulate spending, so they are a good thing. President Obama will not extend tax cuts for the rich, no way, no how.
Your doom and gloom posts are growing tiring, Steven. And filled with misinformation and bad analysis. I know it is chic to be all doom and gloom, but really what good are you doing by exaggerating and spinning the doom and gloom? It seems like a whole lot of people get some sort of weird masochistic thrill out of it. Misery loves company, apparently.
Yes, we lost a hell of a lot of jobs during the Bush years and the beginning of President Obama’s and it’s going to take many years to get them back. That’s why us democrats need to stay in power, so these people will get the support they need as the economy rebuilds and switches to new technologies. We need to make sure Republicans do not get in power because we all know who they want to benefit from government. I think by buying into the doom and gloom, you are playing into the Republicans hands electorally. Bitching isn’t going to speed up job growth but will bring down Democrat’s popularity and guarantee Republicans get a chance to give more money to their rich friends.
STOP THE DOOM AND GLOOM NOW OR YOU WILL HELP REPUBLICANS CREATE SOME MORE!
Unless the tax cuts for middle and lower income people are huge and are tax credits that allow people with no tax liability to have money, they will not be large enough in aggregate to do much to the economy.
That is just Herbert-Hoover talk. Obviously none of those jobs were yours.
Either there is a massive increase in jobs soon, or there will be social and political instability in this country. And it won’t be the “revolution of the proletariat”. It will be nativist, right-wing, armed, and real. If you don’t see its stirring you are not paying attention. The “new normal” will not cut it, especially after all the safety nets have been dismantled.
I said it’s going to take a long time to get the jobs back because that is what every expert has been saying. It’s a matter of math, over 9 millions jobs have been lost. It’s reality. That is why it is important that Democrats stay in control so that these people have a chance at being taken care of. If the government doesn’t step in and either create jobs programs and continue to extend unemployment benefits for years to come, then there will be trouble. Our anger should be directed at making sure Democrats win in the fall. George Bush was moderate compared to the idiots leading the Republican Party these days, just imagine what they would do if given back control?
Our anger should be directed at seeing that Republicans lose in the fall. But beyond that our anger should be directed at seeing that particular Republicans lose in the fall – Richard Burr, Roy Blunt, John Boehner, Michele Bachmann, Virginia Foxx, Steve King, Chuck Grassley, Joe “You Lie” Wilson. All of these have strong opposition.
And if Jane Dyer can win SC-03 along with Rob Simmons winning SC-02 and Spratt and Clyburn being re-elected, South Carolina will have a Democratic majority of House members.
Finally, there are folks popping up with write-in campaigns against Republicans that the Democrats chose not to oppose. Helping these campaigns, even if they are losing will require expenditure of GOP funds in defending the seat. (Please, please, will someone take back Wright Patman’s old seat from Louis Goehmert.)
I agree that there is too much “ain’t it awful” and not enough “how do we build enthusiasm in the face of Democratic screwups” diaries in the blogosphere. And too many folks think they can punish Obama for not being progressive enough by letting Democrats fail this fall.
But as you say, this fall’s election is the big one, the clash of civilizations that will determine the direction of the country. That urgency has to be transmitted to the voters. And that can only be done through using our personal networks and getting the votes to the polls. No diary on a blog is going to affect the election one way or another.
President Obama will not extend tax cuts for the rich, no way, no how.
ahem Like O. supported a public option to help control costs in health care, is a “fierce advocate” for whatever policy matter you wish.
If he had spent as much time and energy making the US population at large happier and better off with good policy strongly supported, we would not be in this “doom and gloom” mood, would we?
So who’s gonna whip these Dems into shape WRT these Bush tax cuts expiring?
Who’s telling Senators like Conrad to shut up and do what’s right for the country at large?
Who?
.
What misinformation? Please advise. I have links cited for the above.
First all the tax cuts Congress passed under Bush expire automatically. Congress has to pass a bill to not sunset the middle class tax cuts that were included as part of those packages. The Bush cuts were never designed to be permanent — that’s how Bush got Democratic support for them.
Republicans won’t sign off on any bill that preserves Middle Class tax cuts without also extending tax cuts for the wealthiest. They have already filibustered tax cut bills that had republican written all over them because they were proposed by Obama and the Dems:
For info on the Bush tax cuts and their expiration dates see this link from a former GOP supply side policy analyst btw:
I’m sorry Steven, there was no misinformation in your post. I don’t agree with some of your analysis though. I don’t think the president will sign anything that has tax cuts for the wealthy. Democrats in congress might be talking and dealing, but I’ve heard several people including the president say emphatically that they won’t do it. So I guess I disagree with your whole thrust. I am aware that the tax cuts expire and I agree with your post with the exception of president caving, I don’t think it is going to happen. Bet ya a coffee.
But I was taking out my frustration on the constant droning from all media, blogs, cable news, newspapers about how horrible things are and no hope in sight…it’s all such a downer and really, it’s going to be a while before we get back anywhere near full employment. So are we all going to be depressed for the next 10 years? We need to make sure Democrats get elected in the fall and 2012 and I think the doom and gloom crap is a large reason why the president’s popularity is down.
Hi
I agree with you we need to elect more dems in the fall, and it seems to me pushing the idea that the Bush tax cuts did nothing for stimulating the economy for eight years (unless you worked for Goldman Sachs) is the way they should go about it. I hope they will.
Unfortunately, as we’ve seen with this whole phony “mosque” debate” even good Dems like Howard Dean can get sucked into playing defense rather than playing offense. I am not as sanguine on what Obama would do if faced with a bill that extended all the tax cuts (in light of his administration abandoning a public option in health care), but I don’t think Nancy Pelosi will let such a bill get through the House if we hold the House since most of the Dems at risk are Blue Dogs who are likely to vote on the tax cut issue the same way that any crazy tea bagger would.
Really, all I want is for the Dems to start playing offense. A national ad showing how Bush’s tax policies drove us into a ditch would go a long way toward that goal. I’d flood the country with 15 or 30 second ads showing “8 years of Democratic policies – X million net jobs created vs. 8 years of Republican policies – X million net jobs lost.” Then follow that with “Eight years of Republicans – Average Americans incomes lost $2000 under Republican policies while the rich got even wealthier.” Then “Under Republican healthcare policies X million of people lost their health care or saw huge health care increases, or were denied coverage by health insurance companies and millions were forced into bankruptcy.” I’d then follow that by pointing out “Under Republican oversight of banks, Wall Street and mortgage lenders the housing market collapsed and millions lost their homes because Bush and the Republicans let Wall Street run wild speculating on the value of our homes.” One last commercial would be “Republicans in the Senate spent the last two years filibustering to prevent or delay votes against anything proposed by Democrats that would help the economy — even tax cuts and credits for small businesses and unemployment insurance benefits.”
Then I’d end each commercial by saying that “Republicans if re-elected will to turn back the clock to unleash Wall Street on us again, repeal health care reform, send more jobs overseas, cut more taxes for the wealthy and raise taxes for social security and medicare or seek to outright eliminate it.” The final part of each commercial would be this: “Can we afford to give Republicans control of Government again when all they will do are the same old failed policies that destroyed the middle class, increased the number of poor Americans and helped only their fat cat friends?”
Dem’s should be running attack ads as if it were 2006 and 2008. But no one’s asking me. I can only hope they have someone in charge who sees the value of ignoring the bs attacks by the GOP by attacking them at their weakest point: their lack of ideas.