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So while the decision on whether to extend the tax cuts will have a lasting impact on the deficit and on how the nation’s tax burden is distributed, economists and tax experts say it is unlikely to offer much immediate relief for high unemployment and sluggish growth.
“It may have some small impact along the margins, but firms don’t hire based on tax breaks; they hire based on demand,” said Roberton Williams, a senior fellow at the nonpartisan Tax Policy Center…
The “nonpartisan” Tax Policy Center, is a partnership between the ultra liberal Brookings Institute and the ultra liberal Urban League. The "nonpartisan" Tax Policy Center has never seen a tax cut that it liked.
When they were signed into law in 2001 and 2003, the huge package of income and capital gains tax reductions that became known as the Bush tax cuts were hailed as a way distribute the government surplus and promote long-term economic growth. Mr. Bush was so confident in their power to generate business growth and revenue that he predicted they would enable the government to pay down $1 trillion in debt in just four years.
Those surpluses have now become crushing deficits because of a combination of factors, including the recession, the cost of the wars in Iraq and Afghanistan, the Medicare prescription drug benefit, and the $1.7 trillion in forgone revenue from the tax cuts themselves…
And Hurricane Katrina. And an endless list of spending bills rammed through by a Democrat Congress. And yet the economy was able to withstand all of those things for years – thanks primarily to the Bush tax cuts.
Whatever Congress and the administration ultimately decide about extending the Bush cuts, however, the narrow confines of the debate show how successful antitax groups have been in defining the terms used to discuss tax policy…
Edward D. Kleinbard, former chief of staff of the bipartisan Joint Committee on Taxation, said the reliance on tax expenditures had distorted the budget process because it induced the public to overlook the fact that — unless they are accompanied by spending reductions — tax cuts have the same effect on the deficit as additional spending. It also allows politicians to make unsubstantiated claims about the power of tax-cutting to accomplish other economic goals, he said.
“The thought that tax cuts pay for themselves or that tax cuts alone can turn around this economy is magical thinking,” said Mr. Kleinbard, now a law professor at the University of Southern California. “The debate has become so unrealistic it makes you want to scream.”
What Does Deficit Spending Mean?
When a government's expenditures exceed its revenues, causing or deepening a deficit. This excess spending needs to be financed through borrowing, likely from foreign governments. The increased government spending can help stimulate the economy as more money flows in, but the jump in borrowing can have an adverse effect by raising interest rates.
John Maynard Keynes was an advocate of deficit spending as a fiscal policy tool to help stimulate an economy in recession. During a recession, increased government spending can stimulate business activity, create jobs and spur consumer spending. This creates a multiplier effect in which $1 of government spending helps increase GDP by more than $1. Some complain that the negative effect of deficit spending is that interest rates will increase as the government borrows more. The higher rates make borrowing money more expensive and can stifle growth.
BOEHNER HAS A COUNTER-OFFER ON TAXES.... My biggest concern with House Minority Leader John Boehner (R-Ohio) has nothing to do with his ideology or his agenda, though they leave much to be desired. The more meaningful problem is that, when it comes to public policy, Boehner appears to have no idea what he's talking about.
This morning, for example, Boehner spoke to ABC's George Stephanopoulos, and said he's "open" to some of President Obama's tax-cut proposals. But the would-be Speaker preferred to talk about his counter-offer: "Rep. Boehner called for bipartisan cooperation on two new proposals: First, to pass a spending bill now at the 2008 level and second, to extend the current tax rates for two years."
Let’s face it, at least in private employment, labor unions are on the way out.
Unions have been going downhill for about fifty years. There was a time when almost 35% of all workers on private payrolls were union members. By 2009 it had fallen to 7.2%.
Unions probably deserve to pass the way of the horse and carriage. They have outlived their usefulness.
But working Americans who are trapped in unions because of decisions that were made by others long before they got their jobs have a real problem.
Union Percent of Workers on Private Payrolls
Unions aren’t just dying, they seem to be killing jobs, too. Take a look at what’s happening in manufacturing.
The number of manufacturing jobs is on the decline. Between 1983 and 2009 manufacturing jobs in America declined by about 5.6 million but most of that loss was in unionized jobs. The number of unionized manufacturing jobs fell from 5.3 million in 1983 to 1.5 million in 2009. That's a 72% loss.
State Insurance Commissioner Steve Poizner and former eBay CEO Meg Whitman raised the issue at the state GOP convention last weekend, saying that tough economic times and a $20 billion budget deficit require the next governor to take a hard stance.
Poizner told The Chronicle this week that illegal immigration would be one of his "top priorities" as governor, insisting he would be tougher on the issue that Whitman.
Poizner's stance
"I supported Prop. 187, and she does not," he said, referring to the 1994 initiative, approved by voters but struck down by a federal court that would have banned illegal immigrants from using public services in California.
He said he opposes taxpayer-supported education and health care benefits to undocumented immigrants and their children because the cash-strapped state can no longer foot those bills.
Whitman's chief strategist, Mike Murphy, said she "is as tough as nails" on illegal immigration, supporting efforts to secure the border and opposing sanctuary cities.
But he said Whitman doesn't support Prop. 187-style efforts to remove kids from state services such as health care and K-12 education, saying "there's a line you cross when it becomes gratuitous, and it's important not to cross that line."
Bringing up the controversial issue less than three months before the June 8 primary election is risky because many Latinos - increasingly important as voters in California - painfully recall the pro-Prop. 187 advertisement that showed grainy images of Mexicans crossing the border with the warning: "They keep coming."
Why this issue now?
But advocates for immigrants questioned the candidates' focus, saying illegal immigration has fallen in California during the economic downturn. In addition, the Obama administration has increased deportations and is cracking down on employers who exploit undocumented workers.
"The Republicans have to figure out: Do they need the taste of red meat more than they need the taste of victory in an election in California?" said Fernand Amandi, vice president of Bendixen and Amandi, a national polling firm that ran the Latino outreach program for Barack Obama's general election campaign and has consulted for Republican candidates.
Moreover, a recent Pew Research study showed illegal immigration ranks at the bottom of the 20 leading issues with voters, who are far more concerned with jobs, the economy, education and health care.
"It's shameful that they are returning to this old rhetoric because even the current Republican governor (Arnold Schwarzenegger) has been clear to state that the economic woes have nothing to do with immigrant workers," said Angelica Salas, executive director of the Coalition for Humane Immigrant Rights in Los Angeles, which is sending a group of protesters to the march in Washington this weekend.
“Every one of her immigration ads have been fact checked by people all over the country,” Reid said Saturday after a rally with Latino voters. “Every fact checker said that they are absolutely lies.”
The Angle campaign says she is being unfairly impugned by all this talk of racism, when she was simply trying to call Reid out on lackadaisical enforcement of the country’s immigration laws.
“Sharron has said several times before that illegal immigration is not about race. It is about the rule of law in this country. It would be a misinterpretation to think that one group of people should be singled out,” Angle campaign spokesman Jarrod Agen said Saturday.
“The issue is that we must stop illegal immigration by security our borders, both northern and southern, and by enforcing our immigration laws,” he said. “Harry Reid does not want to end illegal immigration; he is pro-amnesty.”
Now more than ever, there is a consensus to finally confront China's currency manipulation," the New York Democrat said in a statement.
"It is the single biggest step we can take to promote U.S. job creation, particularly in the manufacturing sector. We plan to move forward with revamped legislation on this issue in the coming days," he said.
Schumer's statement comes as President Barack Obama's administration faces a decision by April 15 on whether to formally label China as a currency manipulator in a semi-annual Treasury Department report.
Many U.S. lawmakers complain that China's currency is undervalued by as much as 40 percent, giving its companies an unfair price advantage in international trade.