Reducing Deficits Must Not Be Important

The recent deal between the President and Republicans would extend the Bush tax cuts for two more years and extend unemployment insurance benefits for another year. The purpose of the entire package appears to be to stimulate job growth at a cost estimated to be $984 billion in the next two years. According to the Christian Science Monitor $103 billion of that represents that cost of continuing the tax cuts for those with taxable incomes in excess of $250,000 and $50 billion is the cost of extending unemployment insurance benefits. Also included were a payroll tax cut ($120 billion), extending the child tax credit, college tuition aid, and the earned income tax credit ($21 billion), and accelerated depreciation ($146 billion). The Christian Science Monitor refers to $544 billion in "bipartisan" measures which would include continuing the tax cuts for those with taxable incomes less than $250,000.

The general consensus of economists is that the plan is positive for economic growth and, therefore, for creating jobs - estimated by some at 2.2 million in the next two years. If we just took $984,000,000,000 and created jobs paying $50,000 a year for two years that would create nearly ten million jobs - admittedly temporary. But it makes the proposed deal seem like not such a great job creation deal.

The fact is that the deficit will increase significantly - $984 billion less whatever additional revenue results from the stimulus.

Alan Simpson, co-chair of the deficit reduction commission recently was quoted as saying: "America, you have a serious problem, and time is short to address it." This proposal isn't addressing it.

A recent article in the AARP Bulletin said: "Voters said their major concerns were the $1.3 trillion budget deficit (along with the cumulative $13.7 trillion national debt) and jobs." Politicians seem only to have heard "jobs".