The Propsed $5K tax credit

[Magox]

This is perfect. Thanks for the link and the discussion. I'm going to do a little more digging on this to see if there are any other studies done. I'm a little bit surprised at this comment: "It failed to create jobs, however,[1] because much like today, policymakers ignored the jobs the credit would destroy since it had to be funded by government borrowing." Personally, I'm having a hard time with the idea that $30 billion in government borrowing would destroy any jobs in this environment, but this is just a gut reaction. I'll need to think about it some more.

 

Based on the above, they get a cost per job of between $111,000 and $200,000 per job created, vs. my estimated $50,000. This type of cost per job created will never turn into a positive NPV on the revenue side of the equation because the jobs created (most likely) won't be that high paying. I'll do a little more research and try to see if there are other estimates for that cost number. If their estimates are correct, I'd imagine you'd have to say that, without a doubt, this credit is not a good idea.

 

And, of course, I agree with all of the things in the bottom section that you quoted. These things are certainly important and should be pursued.

Non Partisan Tax Policy Center recently claimed that the $5000 tax credit would be virtually ineffective.

 

http://taxvox.taxpolicycenter.org/blog/_ar...29/4442032.html

 

 

To the surprise of nobody, President Obama has proposed new tax subsidies for businesses that hire additional workers by the end of the year. Structured as a payroll tax holiday, the plan would give companies a $5,000 credit against their share of Social Security payroll taxes for each net new hire, plus a “bonus” 6.2 percent credit for real increases in overall wages. Because the subsidy would be capped at $500,000, small business would be the big winner.

 

Think of this as a jobs version of cash for clunkers or the homebuyers’ credit. The explicit goal is to get employers to accelerate hiring into this year. An optimist would see this as a plan to jumpstart hiring and accelerate the virtuous demand cycle that usually kicks a sluggish economy into gear (the more people who go to work, the more likely they’ll buy stuff, and the more people companies will hire to make the stuff these new consumers want to buy). On the other hand, a cynic might say it is an effort to bail out terrified Democrats by paying companies to hire new workers before the November elections. It might even help Democrats take credit for hiring that was going to happen anyway. A jobs bill, true, but not quite what most of us have in mind.

 

This proposal would cost between $30 billion and $35 billion for this year alone. The White House won’t say publicly how many new jobs it expects to create, but administration officials expect a minimum of 600,000.

 

The problem with subsidies such as this is that they are exceedingly sloppy. A lot of money goes to those firms that would have hired anyway. This, in fact, was the experience with the homebuyers’ credit. It set off a flurry of new home sales last fall as buyers rushed to beat the deadline for getting the subsidy (Congress eventually extended it, but that's another story). Once the tax-generated boomlet ended, the market fell off the table in December.

 

The timing of today’s credit is very different than last winter when Obama proposed a different jobs tax incentive while the U.S. was in the depths of the recession. I was very skeptical then, in part because it was hard to imagine many firms hiring even with a tax holiday. Now, with the economy recovering (GDP grew by 5.7 percent in the fourth quarter of 2009), it is much more likely companies will take advantage of the credit. That’s the good news. It’s also the bad news, since more will also take the credit for doing what they would have done anyway.

 

To its, um, credit, the White House seems to have carefully designed this version. It set reasonable anti-abuse rules (one can think of all sorts of ways unscrupulous firms could game this subsidy). On the other hand, it is trying to keep the credit simple, so it doesn’t discourage companies from participating.

 

Also, the last time Congres tried this in 1977-78, it turned out that relatively few businesses knew about the credit, but it should be much easier for Obama to get the word out. That too will create more both more gross hires and more free money.

 

CBO recently gave this design a good grade for boosting growth and employment. It concluded that a plan like this would increase GDP by somewhere between 40 cents and $1.30 for every dollar of budgetary cost. That’s not as good as increasing aid to the unemployed, but is comparable to boosting infrastructure spending. Creating new subsidies to jolt the labor market may not be great tax policy. But, if you are a Democratic office holder fixated on the top-line unemployment number, it might be the best option out there for some much desired personal security.

 

Other good stuff on that site you might want to check out.

[KD in CA]

All of the small companies I am dealing with have strong cash positions. The ones with cash problems are the startups, and those managing their finances on the edge. If anything, the healthy conservatively-run companies are eyeing the over extended for aquisition. And, when you think of it, that kind of cannibalism is a healthy signal in a recession. IMO the only thing slowing this down - resulting in layoffs and bancruptcies rather than consolidation - in uncertaintity over what Washington will do with new regulations and new taxes.

Fair point, but 'good cash position' is relative to overall size. For a small company it's still usually not that much cash. An unexpected downturn in business (common in this type of economic climate) can change the outlook rapidly, and if the company doesn't have access to additional capital, they need to move quickly to cut expenses, hence jobs. Or if they are forced into a firesale, there will certainly be layoffs by the acquirer.

 

 

Non Partisan Tax Policy Center recently claimed that the $5000 tax credit would be virtually ineffective.

But...but...it's free money. How could it not be effective?

[DrFishfinder]

I don't think getting loans to small businesses is enough if the businesses don't have customers ready to buy their service or product. It's an important component, but the people need to spend, and they're not spending...they're saving. And they're saving because they're watching DC try to buy their way out of this problem while watching their employer try to figure out who's the next to go.

Small business loans are what feeds business and the economy. Small businesses need loans in order to purchase products and pay for services in order to do business. Without that, a lot of small companies are severely impacted in the way they do business. No business means layoffs or company shutdowns. Both of those impact the consumer's ability to spend money on anything and everything. If you don't have a job or are worried you won't have a job, you don't spend or cut way back. If consumers can't spend or severely curtail their spending, that impacts all other businesses, housing market, etc., vertically and horizontally. That in turn, keeps the economy where it is right now....in the tank.

[Alaska Darin]

Small business loans are what feeds business and the economy. Small businesses need loans in order to purchase products and pay for services in order to do business. Without that, a lot of small companies are severely impacted in the way they do business. No business means layoffs or company shutdowns. Both of those impact the consumer's ability to spend money on anything and everything. If you don't have a job or are worried you won't have a job, you don't spend or cut way back. If consumers can't spend or severely curtail their spending, that impacts all other businesses, housing market, etc., vertically and horizontally. That in turn, keeps the economy where it is right now....in the tank.

You realize you're explaining that to someone who owns his own business, right?

[DrFishfinder]

As a small business, I agree - 5 or 10k is not going to get me to a worker unless I'm already convinced I am going to anyway. There is too much political and regulatory uncertaintity, and as somebody already pointed out I bet the hassle of getting the money greatly diminishes the savings for only one or two hires.

 

But I'll disagree on one point, and probably take some abuse for it. I think the equity situation is overblown. All of the small companies I am dealing with have strong cash positions. The ones with cash problems are the startups, and those managing their finances on the edge. If anything, the healthy conservatively-run companies are eyeing the over extended for aquisition. And, when you think of it, that kind of cannibalism is a healthy signal in a recession. IMO the only thing slowing this down - resulting in layoffs and bancruptcies rather than consolidation - in uncertaintity over what Washington will do with new regulations and new taxes.

Point taken. But....

 

If loans to small businesses resume, that will at least jump start the business sector. My primary concern is staying in business. My secondary concern is the uncertainty with regs & taxes.

[DrFishfinder]

You realize you're explaining that to someone who owns his own business, right?

As do I.

[/dev/null]

Election year gimmick to cover incumbents

 

<Incumbent> - Fighting Unemployment!

<Incumbent> - Helping Small Business!

<Incumbent> - Cutting Taxes!

 

Or whatever slogan they add to their re-election commercial

[IDBillzFan]

Small business loans are what feeds business and the economy. Small businesses need loans in order to purchase products and pay for services in order to do business. Without that, a lot of small companies are severely impacted in the way they do business. No business means layoffs or company shutdowns. Both of those impact the consumer's ability to spend money on anything and everything. If you don't have a job or are worried you won't have a job, you don't spend or cut way back. If consumers can't spend or severely curtail their spending, that impacts all other businesses, housing market, etc., vertically and horizontally. That in turn, keeps the economy where it is right now....in the tank.

I'm fairly certain we're both saying the same thing. As I mentioned, small businesses having access to a line of credit is an important component, but the end their business relies on someone buying their products or services. If no one is buying their products or services, all the line of credit does it give them a chance to keep their doors open longer.

[DrFishfinder]

I'm fairly certain we're both saying the same thing. As I mentioned, small businesses having access to a line of credit is an important component, but the end their business relies on someone buying their products or services. If no one is buying their products or services, all the line of credit does it give them a chance to keep their doors open longer.

I think we are too, just debating the "chicken or the egg" question. Without small business loans, more people will get laid off and more businesses shut down which means more people out of work and a lot less "someones" buying any products or services.

[IDBillzFan]

I think we are too, just debating the "chicken or the egg" question. Without small business loans, more people will get laid off and more businesses shut down which means more people out of work and a lot less "someones" buying any products or services.

I understand what you're saying. Freeing up small business loans help keep a bad situation from getting worse. On the other hand, if your regular customer base isn't buying your product, you also face the reality of having a bad situation not get worse for a while before it gets much worse as the business owner shuts the door, fires staff, and then defaults on their new loan.

 

By the way, not directed at you, but related to this topic, another good article here about the value of the tax credit as seen by small business owners.

 

Small Business Has Some News for Big Government

Commentary by Caroline Baum

 

Feb. 11 (Bloomberg) -- “Washington doesn’t get it.”

 

That generic statement is tripping off the tongues of populists and Tea Partiers, business groups and bankers alike. In short, the public is peeved at the politicians.

 

I heard it this week from William Dunkelberg, chief economist of the National Federation of Independent Business, who used his group’s latest survey to opine on Washington’s deaf ear for helping small business.

 

The president and Congress “pay lip service to the fact that small business generates half of private-sector GDP and employs 60 percent or more of private-sector workers,” Dunkelberg says. As far as Washington’s efforts to help this sector of the economy, “instead of stimulus, give consumers a tax cut,” he says.

 

President Barack Obama has proposed using $30 billion of repaid government bailout funds to help community banks lend to small business, part of a “jobs bill” working its way through Congress.

 

Each month the NFIB tallies small-business optimism, or pessimism, which has been the dominant emotion of late. At 89.3 in January, the index is up 8.3 points from its March low, yet it’s languished under 90 for a record seven quarters. The only other time the index plumbed those depths, and for one quarter only, was during the 1980-1982 back-to-back recessions.

 

The news from the nation’s growth engine is getting less bad, but it’s still far from good. Why is small business so glum?

Cutting Econ 101

 

The Right points to uncertainty over looming tax increases (aren’t death and taxes life’s two certainties?) and health-care mandates. The Left says the problem is banks aren’t lending.

 

The truth is a bit of both and something more basic. Small- business owners list “poor sales” as the numero uno problem. And the jobs tax credit for hiring new workers, proposed by President Obama and embraced by Congress, won’t do much to help. Employers aren’t about to pay a new worker $40,000 to earn a $5,000 credit unless that worker generates $35,000 of revenue, Dunkelberg explains. That’s Econ 101 (see “marginal revenue product” or “profit maximization”), a course most of our elected representatives seem to have missed.

 

The tax credit for hiring “has absolutely no impact on our decision-making,” says Phil Kenny, president of Trucks Unique, an Albuquerque, New Mexico, company that customizes pick-up trucks for commercial and individual purposes. “We have no tax liability to take a credit against.”

 

Listening Tour

 

And that’s not all. A tax credit “is not going to make me hire when we don’t have work,” says Jim Henderson, president of Dynamic Sales Co., a 44-year-old construction and industrial supply company in St. Louis with seven employees. “I plan to sell my way out of recession, not wait for Washington to help me out.”

 

If Washington wants to fix a problem -- and it’s far from clear it has that ability -- the place to start is with proper analysis and diagnosis.

 

Pat Felder, who co-owns Felder’s Collision Parts Inc. in Baton Rouge, Louisiana, went to the White House in October, along with members of the U.S. Chamber of Commerce.

 

“Obama came in, talked at us, shook a few hands and left,” Felder says. “I was foolish enough to think small- business owners would have some sort of dialogue.”

Hope Minus Audacity

 

She told me yesterday what she would have told him.

 

“You can’t give with one hand and take away with the other,” she says, referring to tax credits on the one hand and tax increases for those earning more than $200,000 a year on the other.

 

Small-business owners aren’t going to expand when they may need the money to pay taxes next year. Maybe that’s why expectations for business conditions six months out slipped again last month, according to the NFIB.

 

There is hope. The 500 survey responses (out of the total 2,100) Dunkelberg received after the Jan. 21 Massachusetts special election were more upbeat. Perhaps Scott Brown, the Republican candidate who pulled the people’s seat out from under Ted Kennedy’s Democrats, gave small business “some hope for less change,” Dunkelberg says, citing a myriad of presidential initiatives.

 

What would small business like the federal government to do?

 

Channeling Galt

 

“Stay out of our way,” says Sherry Pymer, vice president of Pymer Plastering Inc., a 124-year-old family owned business in Columbus, Ohio. She sounded more like an Ayn Rand hero than a woman dealing with a payroll, unemployment insurance and Ohio’s commercial activity tax. “We don’t want them bailing out banks and big business. We want them to go away with their mandating and meddling and return this country to the principles it was founded on over 200 years ago.”

 

We’re a long way from the Founding Fathers, that’s for sure. The handful of small-business owners I talked to across the country are about as close to the entrepreneurial spirit as it gets. They all had one implied piece of advice for Washington: Less is more. Specifically, you do less -- and get your fiscal house in order -- and we’ll do more, Henderson says.

 

And as for the closing of the federal government this past week due to weather, these small-business owners had one wish: more snow.

[DrFishfinder]

I understand what you're saying. Freeing up small business loans help keep a bad situation from getting worse. On the other hand, if your regular customer base isn't buying your product, you also face the reality of having a bad situation not get worse for a while before it gets much worse as the business owner shuts the door, fires staff, and then defaults on their new loan.

 

By the way, not directed at you, but related to this topic, another good article here about the value of the tax credit as seen by small business owners.

Oh, I'm in agreement with the article as far as the $5k tax credit for hiring. Hiring another person is NOT going to increase my business so it would be absurd for me to hire someone. Companies are laying off and shutting their doors because business is so bad. Why would I hire another person without the business to support their salary?

 

If you assume that things will start getting better, then small business loans would at least serve as a bridge to allow businesses to stay in business and keep people employed until things get better. If I stay in business, then I spend money with other companies on goods and services, keeping them in business, and I keep people employed, which allows them to spend money - also going to other businesses helping to keep them going.

 

Ultimately, it is the decision of the banking institutions as to whether they provide loans to businesses or not. The government doesn't have any way to force that to happen.

[John Adams]

As a small business, I agree - 5 or 10k is not going to get me to a worker unless I'm already convinced I am going to anyway. There is too much political and regulatory uncertaintity, and as somebody already pointed out I bet the hassle of getting the money greatly diminishes the savings for only one or two hires.

 

But I'll disagree on one point, and probably take some abuse for it. I think the equity situation is overblown. All of the small companies I am dealing with have strong cash positions. The ones with cash problems are the startups, and those managing their finances on the edge. If anything, the healthy conservatively-run companies are eyeing the over extended for aquisition. And, when you think of it, that kind of cannibalism is a healthy signal in a recession. IMO the only thing slowing this down - resulting in layoffs and bancruptcies rather than consolidation - in uncertaintity over what Washington will do with new regulations and new taxes.

 

We have 120 employees. 5K wouldn't make a sniff of a difference on inspiring us to hire or fire someone. Hiring someone has a lot more costs associated with it that 5K can't begin to offset.

 

I can't imagine a single workplace where 5K will act as incentive to hire a FT employee.

[Magox]

More thoughts on what we have already been saying.

 

From Bloomberg News

 

Speed Exterminating Co. in Cleveland is the kind of small business where President Barack Obama wants to spur hiring through tax credits.

 

Instead of interviewing applicants to replace a retired worker, Speed Exterminating President John Young is poring over route sheets to see where he can squeeze more work from current employees. With sales down 10 percent and the company coming off a 2009 loss, the prospect of a tax credit won’t motivate him to take on more hands.

 

“I’m not going to just hire somebody because I have the opportunity for a tax credit,” said Young, whose great- grandfather started the company in 1908. “I need to make sure the business is sound.”

 

The credits Obama has backed, and a similar incentive in a jobs bill the U.S. Senate may vote on today, aren’t enough to prompt an increase in payrolls, some small business owners and organizations say.

 

“A business is not going to bring on a new employee, with the very significant expenses that go along with that, for a tax credit of several thousand dollars,” said Mike Elmendorf, New York state director of the National Federation of Independent Business, a trade and lobbying group for small companies.

 

Timothy Bartik, an economist at the W.E. Upjohn Institute for Employment Research in Kalamazoo, Michigan, said tax credits don’t have to persuade every business to hire to benefit the economy.

 

‘On the Fence’

 

“It just needs to be relevant to a few employers who are on the fence,” Bartik said. If four out of five businesses would have hired employees without an incentive, a tax credit is still a cost-effective way to put people to work and pump money into the economy, he said.

 

The president called for tax credits in a Jan. 22 speech in Ohio, where December’s unemployment rate was 10.9 percent. He has proposed a $33 billion package that would give businesses a $5,000 tax credit for each new hire this year and reimburse an employer’s 6.2 percent Social Security tax on wage increases that exceed inflation.

 

Obama said the measures would help 1 million small businesses wavering on whether to increase payrolls.

 

“A job credit can potentially accelerate people who may be planning to hire at some point anyway, but right now are just dipping their toe in the water,” the president said in a Feb. 9 interview with Bloomberg BusinessWeek.

 

Tax Holiday

 

The Senate jobs bill includes a $13 billion plan to offer companies a one-year holiday from the Social Security tax for each person they hire who has been jobless for at least 60 days. The plan would save or create as many as 234,000 jobs, according to the Congressional Budget Office.

 

Obama and members of Congress have made job creation a priority as the unemployment rate hovers near 10 percent. With small businesses generating almost two-thirds of jobs in the U.S. over the past 15 years, those companies are a policy focus.

 

“Most of what we’re hearing out of Washington right now is more about politics than it is about creating jobs,” said business owner Doug Newman, whose Newman Concrete Services Inc. in Richmond, Maine, is down to about 25 employees from a peak of 125 people 18 months ago.

 

“Before you can take advantage of a tax credit you have to be making some money,” he said. “We posted a six-figure loss last year.”

 

Newman said uncertainty about the impact of health-care and energy debates in Washington, on top of economic concerns, makes small businesses reluctant to expand.

 

Let Economy Recover

 

“The best thing Washington could do is say, ‘Let’s take a break from all this expansion of government and let the economy recover,’” Newman said.

 

Roberton Williams, a senior fellow at the Washington-based Tax Policy Center, said much of the benefit of a tax credit would go to companies that would have hired people anyway.

 

“If they need the workers, they will hire them,” he said. “If they don’t need them, it doesn’t make sense even if they are cheap.”

 

The federal government last used tax credits to induce general hiring in the mid-1970s during Democratic President Jimmy Carter’s administration, Bartik said. In that program, about 2.1 million tax credits were given, he said. If two out of three hires would have been made without the incentive, the program still generated about 700,000 jobs, Bartik said.

 

Cheaper Workers

 

“There’s no doubt that if workers are cheaper, more are hired,” said Daniel Hamermesh, an economist at the University of Texas in Austin, who worked on ideas in the Labor Department that led to the 1970s tax credits.

 

Claudia Kovach, who runs City Machine Technologies Inc. in Youngstown, Ohio, said broader tax relief may help more than targeted hiring measures. Her family business, which refurbishes large equipment, cut workers last year for the first time since the company started about 25 years ago.

 

“We need tax reductions not tax incentives,” she said. “The tax credit for hiring is a nice thought, but it’s not going to fix the economy. It’s not going to help my company when I don’t have work coming in.”

[jjamie12]

It would appear that we can close this one up and confidently say "No, we shouldn't" on the $5K tax credit. I haven't been able to find anything that says that this particular tax credit hurdles the "Is this good fiscal policy?" question. (Outside of the general 'Tax cut for small business' thing, which isn't necissarily good fiscal policy.)

 

Although I can't help but believe that there would be some companies, somewhere, who would benefit from this, I've seen no data to suggest that to be the case. Furthermore, if you've got small businesses out there demanding to NOT take $5K from the gov't, so be it!

 

Good discussion on this.

[DrFishfinder]

More thoughts on what we have already been saying.

 

From Bloomberg News

It's reassuring to hear the majority of business representatives quoted, say the same thing I and others have been saying here; that they are NOT going to hire additional people until their business can justify it, tax credit or not.

 

Could the $5k tax sway a business to hire employee(s) if they were already in that decision making process? Sure.

The question is: How many businesses are in that position? Those businesses that are in that decision making process already were probably at somewhere around a 50/50 probability of hiring the employee(s) without the $5k tax credit anyway.

 

I think the real financial impact of this deal is extremely marginal. It smells like a typical government ploy to make them look like they're helping the economy so they can say, "Look what we did" and throw around some absurd numbers that no one could ever verify. And I do NOT say this as a slam on the Obama administration in particular, it is a well known and well used CYA with Smoke & Mirrors tactic by both parties.

 

Dr. Cynical Fishfinder

[Magox]

It's reassuring to hear the majority of business representatives quoted, say the same thing I and others have been saying here; that they are NOT going to hire additional people until their business can justify it, tax credit or not.

 

Could the $5k tax sway a business to hire employee(s) if they were already in that decision making process? Sure.

The question is: How many businesses are in that position? Those businesses that are in that decision making process already were probably at somewhere around a 50/50 probability of hiring the employee(s) without the $5k tax credit anyway.

 

I think the real financial impact of this deal is extremely marginal. It smells like a typical government ploy to make them look like they're helping the economy so they can say, "Look what we did" and throw around some absurd numbers that no one could ever verify. And I do NOT say this as a slam on the Obama administration in particular, it is a well known and well used CYA with Smoke & Mirrors tactic by both parties.

 

Dr. Cynical Fishfinder

It's like the Stimulus and Cash for Clunkers Bill. It's preposterous to say that the Stimulus Bill didn't create ANY jobs, or that the Cash for Clunkers Program didn't help our economy at all, the reality is that yes, the Stimulus and Cash for Clunkers did add to our countries growth and did spur some jobs, but when you put the price tag of both of these bills into context with the net sustained jobs created, it's not difficult to realize that the net pluses aren't proportionate to the price paid.

[DrFishfinder]

It's like the Stimulus and Cash for Clunkers Bill. It's preposterous to say that the Stimulus Bill didn't create ANY jobs, or that the Cash for Clunkers Program didn't help our economy at all, the reality is that yes, the Stimulus and Cash for Clunkers did add to our countries growth and did spur some jobs, but when you put the price tag of both of these bills into context with the net sustained jobs created, it's not difficult to realize that the net pluses aren't proportionate to the price paid.

True dat.

 

But the current administration gets to trumpet, "Look what we did", and parade around throwing out imaginary figures like confetti. Sadly, it seems like it has always been thus.

[Magox]

True dat.

 

But the current administration gets to trumpet, "Look what we did", and parade around throwing out imaginary figures like confetti. Sadly, it seems like it has always been thus.

In a somewhat related note, I caught some of Bernanke's testimony today:

 

 

Many lawmakers voiced concern that businesses back home couldn’t obtain loans, some citing a Wall Street Journal report that found lending had taken its steepest dive since 1942.

 

Bernanke, subtly, suggested Congress shares some of the blame.

 

One of the objectives of the Troubled Asset Relief Program was to give banks capital for lending. “Unfortunately, the politics was very bad, as you know, and the public and the Congress have stigmatized that money,” Bernanke said.

 

Banks have done all they can to get rid of TARP money, so it’s no longer available for lending. “That’s unfortunate,” Bernanke said.

 

As for what Congress can do to spur job creation, Bernanke demurred from endorsing specific proposals but suggested there are a range of “fiscal actions” available.

 

Still, he made clear, “There’s no silver bullet here.”

 

 

Read more: http://www.politico.com/news/stories/0210/...l#ixzz0gUE2pCNX

 

 

I was against the bailout, I know that may sound somewhat draconian on some levels, but I've already gone over my reasons ad nauseam on this site as I do on many subjects, so I'll spare you my reasoning.

 

However, I argued that if you are going to go ahead with this strategy, the Bailout route, it virtually makes no sense for the banks to pay back this money if the whole point of receiving that money was to shore up their capital so that they would have more money to lend. Of course the optics of this bailout was treacherous to say the least, and the fact that there were pay limits for banking executives that were under the TARP bailout definitely motivated these banks to quickly remove themselves from the much stigmatized TARP mandates.

 

The reality is as Bernanke says, there is no silver bullet, it isn't just a matter of capitalization, unemployment factors, declining home property values, an entrenched consumer or choked off credit, it's all of these factors and some.

 

There is no easy way out of this, these quick fix, immediate short term relief "solutions" I'm afraid will do more long term damage to our country, simply because of our unsustainable deficit issues. The best thing I believe we can do is to provide an environment that is business-friendly. A good start would be to scrap the idea of mandating businesses to cover health insurance for their employees and kill off the idea of Cap and trade. Cap that idea with lowering the Corporate tax rates, and this would help increase self sustaining private sector jobs over the long haul.

[KD in CA]

More thoughts on what we have already been saying.

 

From Bloomberg News

 

“It just needs to be relevant to a few employers who are on the fence,” Bartik said. If four out of five businesses would have hired employees without an incentive, a tax credit is still a cost-effective way to put people to work and pump money into the economy, he said.

Yeah, cause 20% of all hiring is going to be a yea or nay decision based on a $5,000 tax credit. WTF is wrong with these people??

 

The Senate jobs bill includes a $13 billion plan to offer companies a one-year holiday from the Social Security tax for each person they hire who has been jobless for at least 60 days. The plan would save or create as many as 234,000 jobs, according to the Congressional Budget Office.

Gee, that's a good idea. Really oughta help the gigantic SSA deficit. And instead of simply divering money from SS, these idiots want to force businesses to create even more paper shuffling which will require the addition of even more government papershuffling jobs that will cost taxpayers even more money. (Insert laughably ignorant "at least they are jobs!" comment from pBills or conner here).

 

Oh, and by the way, a 7.6% rebate for one year isn't going to spur any jobs either, but thanks for more bullsh-- stats Obama.

 

This really might be the dumbest administration ever.

[Adam]

Yeah, cause 20% of all hiring is going to be a yea or nay decision based on a $5,000 tax credit. WTF is wrong with these people??

 

 

Gee, that's a good idea. Really oughta help the gigantic SSA deficit. And instead of simply divering money from SS, these idiots want to force businesses to create even more paper shuffling which will require the addition of even more government papershuffling jobs that will cost taxpayers even more money. (Insert laughably ignorant "at least they are jobs!" comment from pBills or conner here).

 

Oh, and by the way, a 7.6% rebate for one year isn't going to spur any jobs either, but thanks for more bullsh-- stats Obama.

 

This really might be the dumbest administration ever.

Actually, they aren't that dumb. I disagree with a lot of their ideas, like this tax break. Still, we are in a bottomless pit of debt and getting out of it means political suicide, which is taboo in this country. They are in a catch 22 and the thing that will be good for us won't get them re-elected, which is what American politics comes down to.