Saturday, September 04, 2010

Those Stubborn Facts

Interviewed by conservative radio talk show host Heidi Harris on September 1, Repub Senatorial candidate Sharron V. Angle charged

all [Rep.] Shelley Berkeley and [Senate Majority Leader] Harry Reid want to do is put a band-aid on this by extending unemployment, which really doesn't benefit anyone. What happens is of course that your skills stagnate. You become demoralized yourself, you know, feeling that I can't ever get a job, and these are not the solutions to the problem. We have real solutions, but they won't look at the real solutions.

That, I suppose, is what George W. Bush used to mean when he referred to "compassionate conservatism"- we'll shovel as much as we can to the wealthy, then use that shovel to dig the grave for the less fortunate. We're not going to extend unemployment compensation- which workers themselves have paid for- but at least we'll assure you that it's for your own benefit. But there are two recipients of unemployment benefits- the individual and the nation at large.

Mark Zandi, co-founder of Moody's, adviser to GOP presidential nominee John McCain, adviser to President Obama, and now adviser to House Speaker Nancy Pelosi, considered in early 2009 the amount of income generated by implementation of various economic strategies. Here is the chart he produced:

Thirteen options, and "extend unemployment benefits" comes in second, generating $1.64 for the economy for every $1.00 spent. The GOP's favorite nostrums, a corporate tax cut and making President Bush's income tax cuts permanent, come in at 11 and 12 respectively, with the former generation $.30 and the latter $.29.

Similarly, early this year the non-partisan Congressional Budget Office analyzed (table 1 of the report, in PDF) various options for their "estimated effects on output and employment" and found that extending unemployment benefits likely would have the greatest impact; extending tax cuts, the least.

These studies do not deter Representative Mike Pence (R-Indiana), who recently told CNBC host and supply-side adherent Larry Kudlow

C’mon, we know what works. Larry, you know what works better than most Americans, and that is across-the-board marginal tax relief…We’ve got to demand, whether it’s this fall, whether it’s after the election, or whether it’s in a newly minted Congress next year, we’ve got to demand that we preserve tax relief, no American sees a tax increase on January 1, and then promote across-the-board tax relief on marginal rates that’ll really unleash all that more than $2 trillion in trapped capital in this economy.

President Obama and the Democratic congress want to retain the tax cuts for middle-income Americans; when Pence and other members of the Facts Don't Matter crowd talk about "tax relief," they are bound and determined to make sure that the middle class continues to lose ground to the wealthy. There is little standing in their way now, and there will be even less after November.

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