Conservatives Just Killed 240,000 Jobs
They would rather cut a program like TANF that's doing what the private-sector is not doing — at a profit, mind you — than spend $500 million to fund just through the end of the year. That's less than 1% of the $2.3 trillion cost of the tax cuts for the wealthy conservatives do want to extend.
(And a Merry Christmas, by the way, to those who had jobs through TANF, but will face the holidays without them now. Scrooge would be proud. TANF's demise starts a round of layoffs that will extend to the holidays. State and local governments are making efforts to replace the funding they will be losing, but state a local governments are already strapped, and have been for some time, making it impossible for them to sustain those efforts for long if at all.)
They would rather cling to policies that don't create jobs or growth, and have the "smallest bang for the buck," of any other options. Like John Boehner's "two step" job creation plan, that amounts to a long walk off a short economic pier by turning the clock back to the Bush era, with 10-year-old policies that didn't do work the way conservatives said they would.
Tax cuts in 2001 and 2003 under President George W. Bush were followed by increases in the saving rate among the rich, according to data from Moody's Analytics Inc. When taxes were raised under Bill Clinton, the saving rate fell.
...When tax legislation was signed by Clinton in 1993 -- raising the top tax rate to 39.6 percent from 31 percent -- the saving rate fell from 12.1 percent in the second quarter to 9.5 percent in the first quarter of 1994. The Standard & Poor's 500 Index rose 1.9 percent from July through September, after little change the previous three months.
When the first Bush tax cuts were signed into law in June 2001, pushing the top rate down to 35 percent, the wealthy boosted savings. The saving rate climbed to 2.8 percent in the first quarter of 2002 from minus 2 percent in the second quarter of 2001. The increased savings coincided with a 1.1 percent decline in the S&P 500 index.
They prefer the above to helping middle and working class Americans who will spend, thus putting money back into the economy where it can be spent to support jobs and spur growth by increasing demand.
I'm Keri Fulton and I'm here with Chad Stone, the Center's Chief Economist, to discuss the jobs report for June.
2. What's needed to create jobs at this rate?
Stronger demand for goods and services. An effective jobs bill will move these numbers in the right direction. Unfortunately, hopes are fading fast for Congress to enact effective jobs measures. Too many lawmakers seem to think that their immediate priority should be the budget deficit rather than the jobs deficit.
4. How does the absence of a jobs bill hurt the recovery?
Unemployed workers won't have as much money to spend and will cut back their purchases. States will have to raise taxes, lay off workers, cancel contracts and scale back programs even MORE than they otherwise would. Reduced spending by unemployed workers, newly laid-off state employees, and state contractors who lose business will be a significant drag on the recovery and will impede job growth.