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We must do more to cut joblessness; Philip S. Dedig; Beaver County Times; September 14, 2010.
Mr. Dedig supported the proposed federal gasoline tax holiday, Hillary Clinton for President, complained about “business as usual” (“Business as usual in D.C.,” 6/17/08) in Washington, DC, regarding energy, opposed offshore drilling, said Democrat voters deserve better candidates (“Local Democratic voters merit better,” 8/22/08), supported “bailing out Freddie Mac and Fannie Mae” (“Fed, Treasury had to move”, 9/30/08), told us we had “No choice but to help auto makers,” told us “College costs must be made affordable,” supported the $787 billion “stimulus” package (here and here), told us “U.S. can afford health care for all,” and claimed “U.S. Rep. Jason Altmire is a Republican in sheep’s clothing.” If it’s a leftist position, Mr. Dedig supports it.
Below is a detailed critique of the subject letter.
“The 9.6 percent unemployment rate we’re experiencing is unacceptable in a modern American economy.
“If you add in those who gave up finding jobs, the rate would be nearer 16.5 percent.”
[RWC] From here, Mr. Dedig’s facts leave a lot to be desired.
“The situation exists even though corporate America is making record profits - $1.6 trillion last quarter. It also has approximately $2 trillion in cash reserves on its balance sheets.”
[RWC] “Corporate America” did not make “$1.6 trillion last quarter.” $1.6 trillion was the estimate of calendar year 2010 profit updated with second quarter data. This letter is another example of why you should always check facts people cite.
“Corporations claim they cannot hire people because of uncertainty, which is nonsense. If corporations won’t hire, the administration needs to create jobs. Tax cuts and the Federal Reserve’s efforts aren’t working. Federal tax rates are the lowest since 1949.”
[RWC] Note Mr. Dedig doesn’t tell us why it’s “nonsense” that businesses aren’t “hir[ing] people because of uncertainty.” As for the comment “the administration needs to create jobs,” it doesn’t work as we learned during the Great Depression. See Henry Morgenthau’s comments after the letter’s next paragraph.
“Tax cuts … aren’t working?” Here’s what I wrote when Mr. Dedig wrote about “tax cuts” in February (“We must create private sector jobs”): “What ‘tax cuts?’ I suspect Mr. Dedig is talking about the redoing of the income tax withholding tables. All this did was reduce how much was taken from your paycheck during the year. It did not reduce your tax liability for 2009. As a result, when you file your 2009 tax form, you will either receive a smaller refund or have to send a larger check than you would have otherwise.”
“Federal tax rates are the lowest since 1949?” Not true. The current top federal income tax rate is 35% and Democrats want to raise it to 39.6% (pre-Bush tax rate cuts). From 1988-1990, the top rate was 28% and 31% for 1991-1992. As percent of income, total federal, state, and local taxes were 24.6% in 1950 and 26.9% in 2010.
“We need a real jobs bill - no earmarks or riders. The federal government should borrow $1 trillion over five to six years in order to fix our crumbling infrastructure and put Americans back to work.”
[RWC] I thought the $787 billion (now estimated to be $814 billion by the CBO) so-called jobs/stimulus bill signed into law in 2009 was supposed to focus on so-called “shovel-ready” infrastructure projects.
This is a good time to remind you what Henry Morgenthau, FDR’s Treasury Secretary during the Great Depression, said about FDR’s “stimulus.” Testifying before the House Ways and Means Committee in May 1939, Sec. Morgenthau said, “We have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest, and if I am wrong … somebody else can have my job. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises … I say after eight years of this Administration we have just as much unemployment as when we started … And an enormous debt to boot.” Further, unemployment never got below 9.9% before the U.S. entered World War II. With apologies to George Santayana, those who choose to ignore the past are condemned to repeat it. Folks like Mr. Dedig never learn.
“Interest on government debt is at an all-time low, and the ratio of total debt to GDP is 53 percent, which is manageable. A goal of 4 percent unemployment, which is obtainable, would narrow the gap between spending and revenue.”
[RWC] I don’t know where Mr. Dedig got his “ratio of total debt to GDP is 53 percent.” According to the debt clock, our current debt is about $13.5 trillion and our GDP is about $14.5 trillion. It appears Mr. Dedig may have excluded intergovernmental debt (like fed IOUs to Socialist Security) from “total debt.” State and local government debt adds about another $3.3 trillion.
“If our economy cannot provide jobs for the 2.2 million currently unemployed, this situation could exist for years to come. It would be a sad commentary to the American way of life.”
[RWC] Again I don’t know where Mr. Dedig got his data. Based on the employment situation report of September 3, 2010, unemployment was 14.9 million, not “2.2 million.”
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