Thursday, August 18, 2011
Jobs v. Cuts: Dr. Right Debates Dr. Wrong
This debate between economist Robert "Dr. Right" Reich and his alter ego, Dr. Wrong, is funny. But it also points out, simply and effectively, what's wrong with Washington's current obsession with the federal deficit at the same time job creation is pushed to the sidelines as an issue.
In his latest post, Reich also discusses Obama's announced decision to switch to the jobs issue after his vacation in Martha's Vineyard. The administration says the president will give a major speech on the topic right after Labor Day.
As Reich notes, all we've heard so far about Obama's proposals indicates he means to propose provisions that are small-potatoes compared with what we really need to create large numbers of jobs -- "extending the payroll tax cut and unemployment benefits (good, but small potatoes), ratifying the Columbia and South Korea free trade agreements (not necessarily a job-creating move), and creating an infrastructure bank ... which might be helpful depending on its size."
Reich points out the obvious -- that the Republicans will reject any jobs proposal, regardless of how modest it is, so he encourages Obama to go for the fences in an effort to frame the jobs issue on Democratic grounds and shame the Republicans for standing for nothing but paralysis on the jobs issue. "Better they reject one that could make a real difference than one that’s pitifully small and symbolic," Reich writes. "If Republicans reject it, Obama can build his 2012 campaign around that fight. Maybe he’ll even call Republicans on their big lie that smaller government leads to more jobs."
Reich also offers 10 proposals that he thinks should be included in a "bold" jobs initiative:
1. Exempt first $20K of income from payroll taxes for two years. Make up shortfall by raising ceiling on income subject to payroll taxes.
2. Recreate the WPA and Civilian Conservation Corps to put long-term unemployed directly to work.
3. Create an infrastructure bank authorized to borrow $300 billion a year to repair and upgrade the nation’s roads, bridges, ports, airports, school buildings, and water and sewer systems.
4. Amend bankruptcy laws to allow distressed homeowners to declare bankruptcy on their primary residence, so they can reorganize their mortgage loans.
5. Allow distressed homeowners to sell a portion of their mortgages to the FHA, which would take a proportionate share of any upside gains when the homes are sold.
6. Provide tax incentive to employers who create net new jobs ($2,500 deduction for every net new job created).
7. Make low-interest loans to cash-starved states and cities, so they don’t have to lay off teachers, fire fighters, police officers, and reduce other critical public services.
8. Provide partial unemployment benefits to people who have lost part-time jobs.
9. Enlarge and expand the Earned Income Tax Credit – a wage subsidy for low-wage work.
10. Impose a “severance fee” on any large business that lays off an American worker and outsources the job abroad.
If you agree, I urge you to contact the White House as well as your Senator and Congressman to urge them to support a bold plan like the one outlined above. (Click here and enter your zip code on the right.) If we don't do it, who will?
I can just hear Rick Perry screaming "socialism" now. But I wish Reich was Secretary of the Treasury or something in the Administration. He has held a cabinet post before and has had time to think about it. That would really be a good thing in my book.
I don't think these proposals would get past the more cautious Democrats in Congress, let alone the TeaPublicans. But I would make them anyway, just to push the other side into going ape.
Posted by: Stuart Heady | Aug 18, 2011 11:53:34 AM
I did it, and I hope that someone up there is listening.
We need jobs. Enough with the rich already.
Posted by: bg | Aug 18, 2011 2:21:27 PM