As in the song "Lawyers In Love" we have a land, a nation with too many in high places willing to do anything for money neglecting people, honor and principle but a change is coming. No more falling for the lie of living only individualistic and independent lives leaving us divided and conquerable by powerful special interests but a people, a nation collaborating for the greater common good in various groups all across the nation. A land of people working together to help one another with a vision moreover as Jesus would have us be. Love, Mercy, Forgiveness, Kindness....something about another Land. The change is coming

Saturday, October 02, 2010

Larger Deficits, Fewer Jobs If Republicans In Charge

Nothing is more important to Republican politicians these days than jobs and the deficit, that is, at least according to Republican politicians
The only problem with that is the things that Republicans have said they want to do won't actually boost employment or reduce deficits. In fact, much the opposite. If Republicans were in charge from January 2009 onward--and if they were now given carte blanche to enact the proposals they want to enact--the projected 2010-2020 deficits would be larger than they are under Obama, and fewer people would be employed. According to the CBO, The Congressional Budget Office that both Republicans and Democrats agree is the final arbiter in budget matters, Obama's stimulus plan is projected to increase budget deficits over the next decade by $814 billion. However Republicans opposed the legislation, refused to provide an alternative, and now insist that it's been a total failure. So let's be generous and subtract it from their side of the equation. Obama deficit, $814 billion. The GOP deficit, $0. Next up is health-care reform. Obama passed it; Republicans want to repeal it saying it will increase the deficit.

Unfortunately for the GOP, though, nonpartisan experts tend to disagree. Just this Tuesday, for example, the Congressional Budget Office released a letter saying that Obama's health-care reform legislation would "reduce the projected budget deficit by $30 billion over the next 10 years,” while repealing the law would generate "an increase in deficits... of $455 billion... over that [same] period." Factors those figures into the equation and the Obama deficit falls to $784 billion. The GOP deficit, meanwhile, rises to $455 billion.

The final piece of the puzzle is the Bush tax cuts. Obama wants to extend them for the 95 percent of taxpayers making under $250,000 a year; Republicans want to extend them for everybody but the Democratic proposal would add about $3 trillion to the deficit during the next decade, while the GOP plan would cost $3.7 trillion. That brings the total Obama deficit to $3.784 trillion over ten years, and its GOP counterpart to $4.155 trillion.

So assuming that the Republicans would've spent $0 to stimulate the economy in the wake of the largest economic collapse since the Great Depression--an unlikely scenario, given the very real risks of inaction--their proposed policies would still produce a deficit $371 billion larger than President Obama's.

With regard to jobs, it's a similar story. So far, Republicans have only said they'd do--or that they would've done--two large-scale things the Democrats haven't: 1) scrap the stimulus and 2) extend the Bush tax cuts for Americans earning over $250,000 so as not to (in Boehner's words) "impose job-killing tax hikes on families and small businesses."
How would these measures affect employment? Regarding the stimulus, the answer is pretty clear. In a report out this week, the CBO estimates that between 1.4 and 3.3 million fewer people would be employed right now if the American Reinvestment and Recovery Act had never made it through Congress. Split the difference, and the pro-stimulus Obama moves ahead of the anti-stimulus GOP by about 2.35 million jobs.

The effect of tax cuts on job creation according to the CBO, would lower unemployment by 0.3 to 0.8 percent over the next year or so but it's unlikely that extending the cuts for the richest Americans would have much of an effect on small-business hiring, which is a claim that Republicans make with some regularlity. Why? Because only two percent of taxpayers in the top two income brackets actually run small businesses. The other 98 percent of small-business owners make less than $250,000 a year and wouldn't pay higher taxes under Obama's plan.

History isn't on the GOP's side, either. If keeping the top marginal tax rate at 35 percent--the rate under Bush, and the rate that Republicans are fighting to preserve--spurs so much hiring, why didn't America experience any job growth at all during Bush's time in office? And if a top marginal tax rate of 39.6 percent--the rate under Bill Clinton, and the rate that Democrats are fighting to restore--is such a job-killer, why did payrolls grow by 20 percent during the 1990s?

The implication here isn't that higher tax rates equal more jobs. Far from it. But there's simply no evidence, either in the history books or the latest projections, to suggest that extending all of the Bush tax cuts would provide an employment boost large enough to offset the number of jobs that would've been lost if the GOP had succeeded in blocking the stimulus--let alone lasting enough to justify adding another $700 billion to the deficit.

The bottom line, then, is that recent GOP proposals would produce fewer jobs and far larger deficits than the plans Obama has already passed or currently wants to pass.
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