Republican Whip Jon Kyl (R-Ariz.) is deeply concerned about extending unemployment benefits for the neediest of working Americans. Almost 2 million of those out of work the longest because of the recession have seen their benefits go away. He has raised eyebrows by calling jobless benefits a necessary evil", despite the fact that the OMB and most economists correctly point out that putting money that will immediately be spent into the economy provides a boost.
TPM
Kyl dismissed the view of the Congressional Budget Office, and a large swath of economists, that during a recession, extending unemployment is one of the ripest forms of stimulus.
"CBO's been wrong before," Kyl said. "It's not a stimulus for the economy, to try to help people through tough times. It's a necessary evil, in a sense. We'd like not to have to raise revenue in order to pay people for not working--or not to pay them for not working, but because they can't get work."
"To me you shouldn't look at it as an economic matter, it's a humanitarian matter. You got people who are out of work, who can't find work, you want to help 'em out. Families need help. That's why you provide it. You don't do it because it's going to stimulate the economy. You have to borrow the money in order to pay the folks. That borrowing has huge costs. They are adverse economics costs. So it's not a good thing for the economy. It's a bad thing for the economy but it's still the right thing to do for other reasons.
But,
he says: [C]ontinuing to pay people unemployment compensation is a disincentive for them to seek new work."
This Republican meme that people are living high-on-the-hog on unemployment benefits is a complete fallacy, and worse than that, an insult to anyone who has ever been forced to reply on the benefits.
SocialistWorker.com
No one who looks at the facts could take this seriously. The long-term unemployed aren't still jobless because they're enjoying the high life off an unemployment check that averages just over $300 a week--not much above the minimum wage, and not nearly enough to keep a family of three above the official poverty line.
The problem is that there aren't any jobs for the jobless. According to government statistics, there are almost five unemployed workers for every one job opening. Overall employment has grown since the beginning of the year, but not fast enough to keep up with the natural growth in the population, much less replace the 8 million jobs lost in the recession.
And for some some people who are jobless today, they may not work ever again--not because they're "lazy," but because age discrimination has made it even more difficult for workers in their 40s and 50s.
That hasn't stopped wingnut Senate-hopeful Sharron Angle of Nevada...
Allentown Morning-Call
"You can make more money on unemployment than you can going down and getting one of those jobs that is an honest job that doesn't pay as much," Angle recently told an interviewer. "We've put so much entitlement into our government that we really have spoiled our citizenry."
Ah, yes. The citizenry spoiled by sending jobs away and then handing out checks so they can drive their Cadillacs and live in leisure, not working, while titans of industry toil restlessly to support them.
However, when it comes to tax breaks for the wealthiest 3% of Americans (4 percent tax increase on those who make over $250,000), Senator Kyl is undisturbed by digging the deficit deeper to the tunes of $678 billion, even though that's close to the number for 10 years of health care for Americans that was also a problem.
Kyl tried to defend his contradictory positions to Chris Wallace of Fox News:
New York Times
Mr. Kyl's first line of defense was to dismiss Mr. Wallace's query as "a loaded question" because "the Bush tax cuts applied to every single American." Mr. Wallace pointed out that he was only referring to the top tax brackets.
Eventually, Mr. Kyl trotted out the tired and unsubstantiated argument that the tax cuts for the wealthy must be extended because otherwise "you're going to clobber small business." Mr. Wallace persisted: "But, sir, . . .how are you going to pay the $678 billion?" -- at which point Mr. Kyl descended into nonsense. "You should never raise taxes in order to cut taxes," he declared. "Surely Congress has the authority, and it would be right to, if we decide we want to cut taxes to spur the economy, not to have to raise taxes in order to offset those costs. You do need to offset the cost of increased spending, and that's what Republicans object to. But you should never have to offset [the] cost of a deliberate decision to reduce tax rates on Americans."
So now stimulating the economy is a good thing, unless it's by direct infusions of cash under a program like TARP. TARP, which by the way, was proposed by Bush and continued under Obama but is being used to try to hang an non-existant albatross around Obama's neck.
Let's continue to oil company subsidies and tax breaks, to the tune of about $4 billion a year, which Kyl also supports. While stopping unemployment benefits (because of deficit concerns) and supporting tax breaks for the wealthiest 1% of Americans (despite deficit concerns), Kyl also supports tax breaks for big oil, an industry which rakes in billions a year selling a product to the American taxpayer that they've subsidized.
In fact, the oil companies pay a tax rate that ends up being far less than other, smaller and less-well-connected businesses:
New York Times
According to the most recent study by the Congressional Budget Office, released in 2005, capital investments like oil field leases and drilling equipment are taxed at an effective rate of 9 percent, significantly lower than the overall rate of 25 percent for businesses in general and lower than virtually any other industry.
The standard GOP cry is that if we don't subsidize the oil companies, jobs will decrease, as will oil production. If that happens, the terrorists win. However:
New York Times
But some government watchdog groups say that only the industry’s political muscle is preserving the tax breaks. An economist for the Treasury Department said in 2009 that a study had found that oil prices and potential profits were so high that eliminating the subsidies would decrease American output by less than half of one percent.
“We’re giving tax breaks to highly profitable companies to do what they would be doing anyway,” said Sima J. Gandhi, a policy analyst at the Center for American Progress, a liberal research organization. “That’s not an incentive; that’s a giveaway.”
So let's sum up the Kyl/GOP position:
Item: Deficit
Verdict: BAD
Item: Unemployment extension for working Americans hurt by the recession
Cost: $34 billion
Verdict: BAD - drives up the deficit
Item: Tax breaks for wealthiest 1% of Americans
Cost: $678 billion
Verdict: GOOD - although it drives up the deficit
Item: Tax breaks and subsidies for big oil on billions of dollars of profit
Cost: $4 billion
Verdict: GOOD - although it drives up the deficit.
Whose side are they on, tea partiers?
With Republicans claiming to be deficit hawks and frugality champions, it seems to be time to take a look at this chart from the Center on Budget and Policy Priorities showing the true causes of the deficit.
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