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Obama gave his speech on his jobs plan and there are more than enough opinions to go around on the substance of the speech but a couple of things in particular got my attention, namely, the part where he says it's paid for.
We must pass it right away of course because it will be paid for by the budget cuts due in November... wait... it must be passed now because it will be paid for by cuts that haven't happened yet? 'Hello, Mastercard? I know I'm maxed on my card but I really want lunch, don't worry though, after I make cuts to my budget I will have more than enough available credit in November, could you approve my lunch purchase?'
Let's look at a $4000 tax credit to hire the long term unemployed. Sounds great on the surface, finally getting people jobs. Assuming a $4000 tax credit will sway a business into hiring someone they wouldn't have otherwise. I doubt it, most companies have more than that on the line when they hire. And does it create jobs? No, not really. Whether they hire someone who already has a job or not it doesn't change the available jobs. If they hire me and I leave the one I'm at, there's still a job opening. So you have a $4000 tax credit which buys us 0 jobs.
At one point he also talked about, Social Security/ Medicare/ Medicaid reform finally seeming to admit to us anyway that they are unsustainable. But he didn't mention that this was actually in his jobs plan, but another thing on his congressional 'honey do' list. IN his plan, he advocated extending and expanding a FICA tax reduction... Uh, what? Didn't you JUST get done telling us they are unsustainable? You want to bleed them completely dry before they crumble? I constantly hear people say the tax rates are the lowest in 40+ years... in 1955 the FICA rates were 2%... or less. Those rates (not counting temporary reductions) are almost 4x higher. There used to be over 100 workers for every ONE on social security, today it's 3... not 30... THREE!
Even with the last stimulus bill, if you believe the CBO numbers which are hardly more than a guess ranging from 1.4 million jobs to 3.3 million, they cost, using the higher figure, $242000 each. While I'm aware that the money doesn't simply go to jobs, that some has to go to supplies and equipment to DO those jobs, this still seems and exorbitant number.
This plan isn't paid for. It's going to the casino on a credit card and hoping for the pay off because there won't be any money to pay the bill next month and... stopping at the buffet along the way.
