Funding a Program of
November 30, 2010
Job creation must be among the nation's highest priorities.
Without job creation, millions of families will continue to suffer from inadequate incomes that threaten their access to health care, housing, and even food. Unemployment, particularly if it is long term, is financially destructive, and destructive of one’s mental, emotional, and physical health. Even if Congress continues to extend unemployment insurance, benefits stop after 99 weeks. Many workers became unemployed in early 2009 and, with each month that passes, more people are permanently running out of benefits. Job creation is imperative.
Without job creation, millions of unemployed workers and their families have little money to spend. With few customers, firms struggle to survive. Production stalls, hiring is frozen, and investments are put on hold. Firms cannot thrive and the economy will not return to health until people can afford to buy the things they need.
Without job creation, millions of people continue to have little income and pay few taxes. Tax revenues have fallen and the federal deficit has ballooned because people are not working. To get the deficit under control, we must put people back to work, back to earning money, and back to paying taxes.
Job creation must take priority over deficit reduction. Most of the deficit is caused by the difficult economic situation. Putting people back to work will raise tax revenues and reduce government expenditures on safety net programs. Only after the economy is back on a sound footing – only after people have found employment – should the deficit be tackled.
There are numerous sources of funding for job creation. Here are some frequently-mentioned possibilities.
- End the Bush tax cuts for the 2% of taxpayers with the highest incomes: over $250,000 for couples, $200,000 for singles.
- Reinstate the estate tax with progressive rates.
- Limit the mortgage interest deduction.
- Tax financial transactions to reduce speculation.
- Tax capital gains at the same rate as earned income.
- Tax “carried interest” (income earned by hedge fund managers) as regular income.
The National Commission on Fiscal Responsibility and Reform (the “Bowles-Simpson Commission”) will release their report on December 1, 2010. Many people are concerned about their premature focus on deficit reduction and emphasis on spending cuts over revenue increases. Other groups have made alternative proposals for strengthening the economy and reducing the deficit that rely on greater balance between raising revenues and cuts in spending.
- Investing in America’s Economy: A Budget Blueprint for Economic Recovery and Fiscal Responsibility from the Economic Policy Institute, Demos, and the Century Foundation
- Report and Recommendations of the Citizens’ Commission on Jobs, Deficits and America’s Economic Future from the Institute for America’s Future
- A report from Rep. Jan Schakowsky (D-IL), a member of the National Commission on Fiscal Responsibility and Reform
A summary article about these reports, “Liberal Groups to Propose Routes to Smaller Deficit,” by Jackie Calmes appeared in the New York Times on November 29, 2010.