How Dumb is the Jobs Bill?
So the logic behind Stimulus 3, or the so-called “jobs bill” is that the first stimulus (the Bush stimulus of 2008, predicated largely on tax rebates) worked so well the economy lost millions of jobs. The second stimulus (the Obama stimulus of 2009) saved the country, and worked so well that (even though half the money has yet to be spent), we need a third stimulus.
Indeed, simply looking at the US Senate “jobs bill” shows how little lawmakers understand about economics and incentives. Take this key provision
Hiring tax incentives — Exempts employers from paying the 6.2 percent Social Security payroll tax this year on newly hired workers that have been unemployed for 60 days or more. Provides additional $1,000 tax credit for workers retained for at least a year. Cost: $13 billion.
It is interesting, because up until now, many supporters of government-led job creation would deny that lower taxes would help create jobs. But what they’ve crafted is a narrow tax break that favors a few.
Consider, for instance, if you were in scenario in which you are getting married and moving away (as our two of our staff), and looking for a new job. Employers will most likely wait two months to hire you, in order to get a big discounts. Or if you have only been off work for one month, you are certainly at a disadvantage to someone who has been off longer – as even at the same salary, the will cost an employer less.
Even worse, companies can save money by laying off workers, and hiring from the ranks of the unemployed.
The jobs bill is just another example of politicians trying to “do something” in order to improve their approval rating, even if it does nothing to help the economy.