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Daily Archives: January 27, 2010

A Plea to the President: Tear Up That Speech

Posted on January 27, 2010 by admin | 1 comment

My colleague and fellow blogger, Randy Wray, has just argued that President Obama should scrap the speech he’s planning to deliver tonight and surprise the American people with something entirely different. I couldn’t agree more. And while I agree that job creation must be JOB ONE in the months (and years) ahead, I would encourage the President to make massive tax relief the cornerstone of tonight’s speech.

Specifically, the President should call on Congress to support a full and immediate payroll tax holiday. Right now, the government takes away about 15% of our incomes in the form of payroll taxes. With a full payroll tax holiday, a married couple earning $60,000 a year would see their take-home pay increase by about $750 each month. In the aggregate, this will help millions of Americans pay their mortgages, student loans, credit card bills, and so on, while at the same time reducing business expenses (remember that employers contribute to the payroll tax too). All told, a full payroll tax holiday would allow Americans to keep about $1 trillion this year.

So stand before us, Mr. President, and tell us that you want to stop taking this income away from us until we, as a nation, have clawed back every job that has been lost since the start of the recession. Tell us that you intend to take bold steps to protect jobs, keep families intact and provide relief for millions of American businesses. Tell us that you have done all you intend to do to help the banks and the automakers and that you will not accept a jobless recovery — that an increase in economic activity is meaningless without rising employment in good jobs.

And, most importantly, tell us that you refuse to adopt a timeline for cutting the deficit. Tell us that you will not take one dime of payroll taxes away from us until your Administration can declare “Mission Accomplished” on the job front.

Finally, tell the American people that anyone who opposes a payroll tax holiday wants to keep taking hundreds, perhaps thousands, of dollars from them every month. Then watch what happens in 2012.

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Posted in Policy and Reform, Stephanie Kelton, Taxes, The Federal Government Deficit, Uncategorized, Unemployment

Tagged Fiscal Policy, Hyman P. Minsky, Policy and Reform, Stephanie Kelton, Subprime mortgage crisis, Taxes, The Federal Government Deficit, unemployment

What President Obama Ought To Say In His State Of The Union Address

Posted on January 27, 2010 by admin | 4 comments

By L. Randall Wray

President Obama: Over the past year it has become amply clear that targeting most of the Federal Government’s assistance toward Wall Street rather than Main Street has done nothing to help pull our economy out of the deepest downturn since the Great Depression. I have become convinced that the single most important thing Washington can do to help America is to create jobs–and to create them on an unprecedented scale. I am talking about millions of jobs, maybe tens of millions.

So here is what I propose to do. I am directing my administration to come up with a plan that will guarantee a decent job at decent pay for any American who wants to work–regardless of race, regardless of gender, regardless of education or training, and regardless of previous work experience. I want these to be productive jobs–jobs that will enhance the well-being of everyone in our country. Among the areas that ought to be targeted I would include education, care for our aging population, cleaning up our environment and retrofitting buildings to make them energy efficient, and repairing and improving our nation’s infrastructure.

It is time that we take seriously the United Nation’s Universal Declaration of Human Rights, which guarantees the right to a job–which was actually one of the key components of the Second Bill of Rights proposed by my predecessor, Franklin Roosevelt more than 65 years ago. I am ashamed that our nation has not lived up to its commitment to human rights, and I aim to change that.

This program will be permanent, and it will ensure that from this day forward, the United States economy will operate with true, full employment. We will look to the New Deal job creation programs for inspiration, but we will go further because we will end forever the horror of involuntary unemployment. Eliminating the scourge of unemployment is good politics, it is good social policy, and it is good economics.

Now, I am not an expert in esoteric economic theories that are common in the ivory towers of some universities. But I can tell what is nonsense. And any economist who tells you that it makes sense to keep tens of millions of people unemployed is spouting nonsense.

Our nation faces many challenges, today and in the years to come. But we can solve these by working together–and it will take all of us, working, together, to meet those challenges. The truth is that we can no longer afford to keep people out of work. The job is too big. So I ask my administration, and I ask you, the American people, to put our minds together to create those jobs and I will commit the Federal Government budget to provision of decent wages for all of those who want to fill them.

Thank you.