Unemployment extension one of few fiscal tools left

“That leaves … unemployment benefits — as the primary tool government has to increase the demand for goods and services.”

Total nonsense. If this alleged economist’s reasoning for this is that UI benefits will be spent thereby generating demand and movement in the marketplace, then the same thing could be achieved on a much larger, and most likely, more successful scale by declaring a tax holiday for all wage earners.

Suspending the collection of payroll taxes for all wage earners for a period of six months, for example, would be based on the same theory but have a more dramatic stimulative effect than simply continuing UI payments for a milion people and would have the full support of most republicans in congress.

I can’t believe a “senior economist” hadn’t thought of that.

What a fantasy!

How will this help the unemployed given that most such jobs won’t materialize until long after that six-month tax holiday has lapsed given the cautious employers? In the meantime, many of those who are unemployed will either leave the labor force or find themselves in such downward spirals that would be very difficult to pull themselves out of in a reasonable period of time such as bankruptcies, foreclosures, going on public assistance and so on.

Finally, what makes this “senior, racist, so-called conservative troll” think the Republicans will go along with his conclusion given their recent, Democrat-inspired adherence to the paygo rules?

Sheesh.

Lane:
My “tax holiday” suggestion was in response to the alleged economist’s assertion that extending unemployment benefits was “the primary tool government has to increase the demand for goods and services.”

If you think the tax holiday wouldn’t stimulate consumer spending, then you would believe the same about the unemployment funds doing it.

And why do I think republicans in congress would go along with it? Because republicans have been suggesting it for, oh, about 18 months now. And it could be paid for with the hundreds of billions that remain in the “stimulus” slush fund instead of sitting on that money to be used for democrat campaign funds.

Dennis, I am skeptical that your proposed tax holiday would have that kind of stimulative effect that would persuade employers to hire more. How many wage-earners would actually spend their tax savings given the growing uncertainty prompting more savings as well as paying off existing bills?

As for UI, I find it laughable that this can stimulate consumer spending given that it is insurance to help people stay somewhat afloat until they find new jobs. Given the deep recession we are in with huge numbers of unemployed, it would be a mistake not to extend this until the economy has sorted itself and employers feel confident enough to hire again. Without UI, people would have no money to spend and to pay bills – and thus would actually pull down consumer spending – which would likely counteract most, if not all, the gains that may be realized from your tax holiday.

As for the slush fund, it is borrowed money. If some of it must be used for breads and circuses, I’d rather it be used to fund UI extensions than for your tax holiday.

Lane – I just checked my last pay stub and my federal payroll taxes are over $1200 a month. Even if people didn’t spend all that, saving it would provide funds for people to borrow from the bank. Paying off credit cards would free up that personal credit for people to start spending again using that paid-off card (you know they’d do it).

In a recession, there are no economic downsides to giving people $1200 a month of their own money back.

Still avoiding the subject of those who are unemployed and very dependent on those UI checks until employers start hiring again …

>> Even if people didn’t spend all that, saving it would provide funds for people to borrow from the bank.

This doesn’t take into account various recent, unsuccessful attempts by regulators to get banks to ease lending.

>> Paying off credit cards would free up that personal credit for people to start spending again using that paid-off card (you know they’d do it).

This doesn’t take into account the upheavals in the credcard industry which includes cancelling credcards, raising rates and changing terms, reducing available lines of credit and so on.

Sorry, Dennis, things have changed. I doubt a lot of people will go back to the way things used to be.

Finally, I feel a tax holiday of that magnitude is irresponsible given that government just doesn’t shut down for six months; its services must be paid for one way or the other. Unless you want to borrow more money from China.

Well then I guess you’re going to have people dying in the streets because this congress is not going to keep paying people to stay home indefinitely. And I’m talking democras. When the republicans take over in November, things will change, but not until then.

To re-iterate what has already been commented elsewhere, most of the Democrats are trying to pass the UI extension while all the Republicans are against it cynically citing paygo rules that were re-instated by the Democrats after being allowed to lapse by the Republicans when W took office.

Why not cancel those expensive defense projects such as the unneeded C-17 transport planes and the second engine for the F35 Joint Strike Fighter plane that Obama and the Pentagon does NOT want, and use those funds for the UI extension?

The more things change, the more they stay the same. Things always change; I am far more interested in fixing what is broken and doing what is right than I am about ideology that comes and goes depending on the idiot(s) of the moment.

Hey Denny,$1200.00 bucks a month in federal payroll taxes!!Sounds like you have a cushy job,given the fact that most of the LITTLE people in the land of opportunity don’t even earn that much in one month.You my dear republican troll are a card carrying nut job!!