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Sluggish private job growth indicates failure of tax cuts
EPI ^ | Jan 31, 2006 | Lee Price

Posted on 01/31/2006 6:13:23 PM PST by liberallarry

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To: liberallarry
Very good people and low-wage, hard-workers are in demand (probably always). What about the others?

Become "very good" at what you do, or accept the low-wage hard work. What do expect to do -- skate your way through life on somebody else's hard work?

More typical crap from the same crowd....

41 posted on 01/31/2006 7:49:01 PM PST by been_lurking
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To: liberallarry
but who expect good wages for their labor.

Maybe they should expect wages that are equal to their worth instead! Wouldn't that be a more realistic expectation, and make more economic sense?

More crap form the same crowd...

42 posted on 01/31/2006 7:52:38 PM PST by been_lurking
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To: Lazamataz
Understanding agendas helps understand subsequent spin.

Good point Laz. Here's the Board of Directors for E.P.I.

Tells us all we need to know about their agenda.

Chairman of the Board
Gerald W. McEntee
President, American Federation of State, County and Municipal Employees

Secretary-Treasurer
Morton Bahr
President, Communication Workers of America

Lawrence Mishel
President, Economic Policy Institute

Jeff Faux
Distinguished Fellow, Economic Policy Institute

Barry Bluestone
Professor of Political Economy, Director for Urban & Regional Policy, Northeastern University

R. Thomas Buffenbarger
President, International Association of Machinists

Ernesto J. Cortes, Jr.
Director, Industrial Areas Foundation

Leo W. Gerard
President, United Steelworkers of America

Ron Gettelfinger
President, International United Auto Workers

Robert Kuttner
Editor, The American Prospect; author, columnist, Business Week, New Republic

Julianne Malveaux
Economist, writer, syndicated columnist; owner, Last Word Productions

Ray Marshall
LBJ School of Public Affairs, University of Texas; former Secretary of Labor

Edward J. McElroy
President, American Federation of Teachers

Jules O. Pagano
Vice President, American Income Life Insurance Company

Bernard Rapoport
Chairman of the Board, American Income Life Insurance Company

Bruce Raynor
President, UNITE (Union of Needletrades, Industrial and Textile Employees)

Robert B. Reich
Heller Graduate School, Brandeis University; former Secretary of Labor

Andrew L. Stern
President, Service Employees International Union

Richard L. Trumka
Secretary-Treasurer, AFL-CIO

Roger Wilkins
Professor of History and American Culture, George Mason University

Nope. No agenda here. LOL!

43 posted on 01/31/2006 8:00:02 PM PST by Mase
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To: liberallarry
I mean those who are not brilliant but who expect good wages for their labor. Those who are being gradually forced out by cheap labor from Third-World countries. Most of America's workers.

I am by no means brilliant, but I earn a good living. Getting here has been a combination of hard work, study, and making myself useful to those who would employ me. My wife followed the same formula. We're quite ordinary, and I believe we are typical of most of America's workers.

44 posted on 01/31/2006 8:03:08 PM PST by Denver Ditdat (Leftist New Year's resolution: force Christians into the closets vacated by gays)
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To: liberallarry

This isn't implausible.

The liberals are just missing the story of the ever growing number of baby boomers who are retiring and dropping out of the workforce. That is why job growth can be low, and there can also be no unemployment crisis.

Low job growth combined with more production equals higher productivity equals higher wage growth equals higher profit growth.

What is so bad about that?


45 posted on 01/31/2006 8:04:25 PM PST by Hermann the Cherusker
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To: Mase
Is that a real list, or did you just make that up?

Hard to believe anyone could get so many numbskulls in one place.

46 posted on 01/31/2006 8:06:40 PM PST by THX 1138
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To: liberallarry

Lee Price came to EPI after 18 years in government and eight years at the International Union, UAW. During six years at the Commerce Department, he served as Chief Economist and Deputy Under Secretary for Economic Affairs (during Clinton Administration). He also spent 12 years on the staff of four Congressional committees: Joint Economic, Senate Budget, Senate Democratic Policy, and House Banking.


47 posted on 01/31/2006 8:09:05 PM PST by kcvl
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To: liberallarry

Their biased "agenda" is highly relevant as they are obviously activists and not scientific or objective. Thus, I do not trust any data that they present. As soon as I saw that they were basing their comparison on 2001 it was obvious that they had an agenda that I do not respect and that it would not be worth my time to discuss them further.


48 posted on 01/31/2006 8:09:53 PM PST by Enchante (Democrats: "We are ALL broken and worn out, our party & ideas, what else is new?")
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To: THX 1138
Is that a real list, or did you just make that up?

Truth is more bizarre than fiction. You can't make this stuff up. What's amazing is that EPI is often cited on FR as a credible source.

E.P.I. Board

49 posted on 01/31/2006 8:12:53 PM PST by Mase
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To: Mase
Jules O. Pagano
Vice President, American Income Life Insurance Company

Bernard Rapoport
Chairman of the Board, American Income Life Insurance Company

Note to self: never do business with American Income Life Insurance Company...

50 posted on 01/31/2006 8:17:17 PM PST by THX 1138
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To: liberallarry

Lee Price, research director with the Economic Policy Institute, a liberal think tank.



The American Prospect was founded in 1990 as an authoritative magazine of liberal ideas, committed to a just society, an enriched democracy, and effective liberal politics. Robert Kuttner, Robert Reich, and Paul Starr launched the magazine initially as a quarterly.


51 posted on 01/31/2006 8:21:18 PM PST by kcvl
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To: liberallarry

The EPI dudes still haven't caught up to this from 6 months ago:

A tale of two tax cuts
Jun 13, 2005
by Jack Kemp

http://www.townhall.com/opinion/columns/jackkemp/2005/06/13/15726.html

A The latest budget data confirm once again what I've been saying for the last 30 years: Cutting tax rates in the right way clears jobs and boosts economic revenues. On the other hand, attempting to revive economic growth by just "putting money in people's pockets" through tax credits, deductions and rebates not only fails to increase growth but also creates disincentives to work, save and invest, which ends up costing the government lost revenues.

The historical record couldn't be clearer. The Kennedy tax-rate reductions that triggered the prosperity of the 1960s and produced a windfall of government revenues indeed ended up helping balance the budget in 1964-65. Federal revenues doubled in the 1980s as a result of the Reagan tax-rate cuts. Today the evidence continues to mount that the Bush tax-rate reductions of 2003 also got the economy moving again and are leading to increased federal revenues.

The most compelling evidence comes from the latest Congressional Budget Office monthly report, which shows the totals for the first eight months of fiscal 2005 and tells us most of the story for the whole year. The most notable figure in the CBO report is that corporate income tax receipts are up a stunning 47.5 percent this year. Individual income taxes are also up sharply this year, leaping 20.5 percent over last year.

This is powerful evidence that the investment tax cuts - lowering the tax rate on dividends and capital gains and allowing an increase in the amount of investment spending that businesses may write off in the first year - breathed life back into financial markets, drove a broad revival of American business and increased personal income.

It could not be clearer: Where government revenues are concerned, economic growth really is everything. The economic recovery triggered by the 2003 tax rate reductions means not only greater prosperity for all Americans but more revenue for government, too. Are there disparities? Yes, of course. And are there inequities? Yes, but a rising tide lifts all ships. Where ships are in need of repair, government can and should step in to help out.

It was John F. Kennedy who noted 40 years ago that reducing punitive levels of taxation, such as the 60 percent tax on dividends prior to the 2003 law, is the best way to close the budget deficit. His words are as relevant today as in 1962:

"As I have repeatedly emphasized, our choice today is not between a tax cut and a balanced budget. Our choice is between chronic deficits resulting from chronic slack, on the one hand, and transitional deficits temporarily enlarged by tax revision designed to promote full employment and thus make possible an ultimately balanced budget."

"Tax revision designed to promote full employment" - that was Kennedy's way of distinguishing between reductions in tax rates that increased the incentive to work, save and invest, and tax credits, rebates and deductions that may actually decrease the incentive for productive behavior and cost the government revenue. All tax cuts are not created equal.

A recent study by Dan Mitchell of the Heritage Foundation makes this point vividly. The economy clearly performed better and tax revenues grew faster after the 2003 tax-rate reductions than after the 2001 tax legislation, which included a tax rebate, a new refundable child tax credit, a minuscule 1-percentage-point income tax-rate reduction and a small, gimmicky reduction in the death tax.

The reason, as Mitchell pointed out, is that the 2001 tax cuts were based on the Keynesian demand-side notion of putting money in people's pockets in the form of rebates and credits, which simply does not work to change economic incentives.

"Supply-side tax cuts, by contrast," Mitchell observed, "do improve economic performance because they reduce tax rates on work, saving and investment."

The contrast between the effects of the demand-side 2001 tax cuts and 2003 supply-side tax rate reductions proves the point. In Mitchell's words: "Economic growth since the 2003 tax cut has averaged nearly 4.4 percent on a yearly basis, compared to just 1.9 percent in the period following the 2001 tax cut. Net job creation since the 2003 tax cut has averaged more than 150,000 per month, compared to declining job numbers in the period after the 2001 tax cut. Tax revenues have grown by an average of more than 6 percent annually since the 2003 tax cut, compared to falling tax collections after the 2001 tax cut."

Bush's tax rate reductions, like JFK's supply-side tax cuts, have successfully reduced the deficit, despite Congress's continuing lack of spending discipline.
While outlays have jumped by $110 billion so far this year, revenues have far outpaced them, rising by $183 billion and thus closing the budget deficit by $73 billion.

That's serious money. In fact, it's almost enough by itself to pay for stopping the raid on Social Security and saving the surpluses ($85 billion next year) in personal retirement accounts, the only true lockbox that will prevent government from getting its hands on the money.

While most members of Congress have been wringing their hands over how to pay the so-called "transition costs" for personal retirement accounts, they have completely overlooked the fact that Bush's 2003 tax-rate reductions created a prosperity dividend that can be used to make a down payment on permanent solvency.

If Congress would take the next step and reform the federal tax code - by reducing tax rates even further and simplifying the code, completing the job it began of defining taxable income properly so as to completely eliminate double, triple and quadruple taxation of income - the prosperity dividend would increase and solve the problem of financing personal retirement accounts.

It's not rocket science, voodoo or magic. It's incentive-oriented economics. Cut tax rates, generate more economic growth, slow the growth of federal spending, capture higher revenues to make a down payment on personal retirement accounts.

Stop the raid; start the accounts. I believe on these points, JFK and RWR would have agreed.


Jack Kemp is Founder and Chairman of Kemp Partners and a contributing columnist to Townhall.com.

Copyright © 2005 Copley News Service


52 posted on 01/31/2006 8:49:58 PM PST by Enchante (Democrats: "We are ALL broken and worn out, our party & ideas, what else is new?")
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To: been_lurking
Liberals are pissed off because Wal-Mart offers non-union jobs to unskilled workers at less than the normal unionized wages found at the U.S. automakers who have to pay extremely high wages and pensions to people with little more than high school diplomas. The automakers now face bankruptcy under the weight of union demands while their foreign competitors flourish.

You want a higher wage, get an education in a field that you can earn a real living at and that doesn't mean a degree in basket weaving either.
53 posted on 01/31/2006 9:06:28 PM PST by TheForceOfOne
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To: GianniV; liberallarry

Successful, educated, hard-working people who prefer that government stay out of their faces and out of their wallets tend to vote for Republicans. On the other hand, unambitious, semi-literate, jobless people who look to government for mothering and "free stuff" tend to vote for Democrats.

If you were a politician, you would obviously want MORE, not less, of the kind of people who vote for your party.

Democrats thrive whenever there is a recession in which people lose their jobs, their homes, and their savings - - and so a recession is precisely the kind of economy that the Democrats are BEGGING for, especially since they attract votes based on promises of wealth and income redistribution (handouts) and that is a campaign strategy that happens to work best in a poor economy.

Therefore, the Democrats should not be expected to support any policies, including tax cuts, which might IMPROVE the economy - - that would be counterproductive to their selfish ambition of getting elected.

In the end, there is always a straight line between A and B.
The Democrats WANT a failing economy - - this isn't rocket science..


54 posted on 01/31/2006 9:29:07 PM PST by Lancey Howard
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To: liberallarry

The economy has shrugged off the worst attack in history on American soil, the war on terror, hurricanes galore, the almost total loss of a major American city. Despite all this, home ownership is at an all-time high and unemployment is at one of the lowest levels ever! Yeah, the tax cuts had nothing to do with it!


55 posted on 01/31/2006 9:37:11 PM PST by winner3000
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To: liberallarry
With the economic hits of high oil prices and climbing interest rates, there may very well have been job LOSES and recession if the tax cuts had not kept money in buyer's pockets.

That's the key all right. But in whose pockets? Counter-cyclical tax cuts and government spending increases are standard Keynesian economics. But these are supposed to be middle-class tax cuts which stimulate private spending. Large tax cuts for wealthy individuals were supposed to stimulate business investment (and job creation). The authors argue that they didn't.

However, Larry, we should keep in mind that the terms "middle class" and "wealthy" are used by Democrat demagogues as class-warfare labels that totally miss their logical targets.

The taxes we are talking about are income taxes.

The truly wealthy do not have income taxes that amount to much. THE TRULY WEALTHY DO NOT HAVE TO WORK!

Take, for example, John F. Kerry and myself.

I came to this country in 1960 at age 6 as a Cuban refugee with nothing but the clothes in my family's suitcases. My father died when I was 16. I worked and paid for my own way through college, went through medical school with a U.S. Navy scholarship that cost me 8 years of active duty military service, worked my @ss off for the next quarter century after medical school graduation and now, working six days a week, I earn enough money to be called "The Wealthy" by the likes of John F. Kerry.

By comparison, John F. Kerry was born with a silver spoon in his mouth, married a woman worth $300 million, divorced her and then upgraded to a woman worth $750 million dollars.

Yet, I pay more INCOME TAXES per year than John F. Kerry, who is living a $750 million lifestyle, pays!

John F. Kerry is "Wealthy".

I am merely a middle class workaholic.

Yet, I pay more money per year in income tax than John F. Kerry does.

Income taxes do not hit "The Wealthy".

Income taxes just allow the truly "Wealthy" to live off their capital relatively tax-free while the rest of us who HAVE to work end up getting the shaft.

56 posted on 01/31/2006 10:13:10 PM PST by Polybius
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To: frankjr

I don't recognize but one name, Robert Reich, but it's enough to discount the rest of the article. Just checked the one from the LBJ School of Public Affairs; he worked for Carter and Clinton and is a graduate of Berkeley. Won't bother checking on the others.


57 posted on 01/31/2006 10:23:24 PM PST by skr ("That book [Bible], sir, is the rock on which our republic rests."--Andrew Jackson)
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To: liberallarry
Who cares? Ad hominems won't cut it as a refutation of facts or ideas.

LOL. There aren't any "facts" or "ideas" to begin with, socialistlarry. So ad hominems are perfect rebuttals.

58 posted on 01/31/2006 10:25:54 PM PST by Extremely Extreme Extremist (None genuine without my signature - Jim Beam)
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To: liberallarry

Gee Bush said tonight that America had creatd 4.6 MILLION new jobs since 2001.

Who to believe ...


59 posted on 01/31/2006 10:29:37 PM PST by Let's Roll ( "Congressmen who ... undermine the military ... should be arrested, exiled or hanged" - A. Lincoln)
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To: coconutt2000
a great deal of the money given to the poor will end up in China.

This observation really clarified things for me.

Under present conditions - rapid globalization of capital and goods, and to a lesser extent of labor - American labor is uncompetitive without protection. So no one in the private sector is going to invest in projects which depend on that labor if they have to compete in the international marketplace.

At the same time products produced with low-wages - mostly from China - are dominating American markets.

Put the two together and you arrive at the conclusion that stimulating the economy with counter-cyclical tax cuts - either supply or demand side - will not result in new domestic jobs, not without protection.

The Administration does not like protectionism. Thus they were left with a no-brainer; Choose between expanding American ownership of production or the opposite.

60 posted on 02/01/2006 8:18:59 AM PST by liberallarry
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