(Herman Cain) – It started with the prediction by the administration that passing the $787 billion stimulus bill would keep the unemployment rate under 8 percent. It exceeded 8 percent in 2009 and has not gone below 9 percent since.
The administration then wanted us to swallow the concept of “saved jobs” when it became apparent that the stimulus bill was not working. Most of us did not swallow the imaginary concept.
In the president’s State of the Union address, he declared job creation to be a top priority. So now the Democrat-controlled House has passed a “jobs bill” that might generate 250,000 jobs according to economist Mark Zandi of Moody’s Economy.Com. He also points out that the economy has shed 8.4 million jobs since the recession began in December 2007. That’s an average of 310,000 jobs per month.
Oops! All of this legislative hot air to maybe offset less than one month’s worth of job losses since the recession began.
I will caution you that the date when the recession started is not unanimous among analysts, but we will use the December 2007 date for purposes of this discussion to illustrate two additional simple facts:
• The $35 billion House bill is 4 percent the size of the $787 billion stimulus bill
• A decrease of 250,000 in the number of unemployed workers would decrease the unemployment rate from 9.7 percent to 9.5 percent. That would assume that employers did not cut any more jobs between now and year end.
The administration will argue that not all of the stimulus money has been spent yet. Good! Then stop spending! The $787 billion stimulus bill is notworking , so why should we expect the $35 billion House bill to work? We shouldn’t, because if you don’t invest $787 billion the right way to create jobs, throwing another $35 billion at the problem almost the same way will not work, either.
To add insult to this delusional jobs-creation legislation, the Senate is working on a $15 billion jobs bill that would have to be reconciled with the House version. It would be a debate over which thimble of Washington water they are going to pour into the Potomac River while looking for a ripple.
Unemployment is very real to the 14.9 million people who would like a job but can’t find one. Businesses are in real danger of having to let even more workers go because of no real signs that the administration and Congress are going to do anything substantive to stimulate jobs and economic growth. Worse yet – many businesses are in real danger of having to shut down completely.
Exempting businesses from paying the 6.2 percent Social Security payroll tax through the end of the year for new workers, and offering an additional $1,000 tax credit if they stay on the job for a full year, are not real tempting to businesses to start hiring again. Nor is it really tempting to businesses to continue the write-off of equipment purchases that they are already allowed to take.
Now here’s some real jobs stimulus substance!
Exempt businesses from paying both the employer and employee portion of the Social Security payroll tax for one year. Additionally, make the tax credit a tax cut up front for hiring an unemployed person, and make the current tax rates permanent before they expire at the end of the year.
Now add to that list the permanent suspension of repatriated profits and you create not only millions of new jobs, but some certainty in this economy that would cause businesses to invest again, and the recession would soon be in our rear view mirror.
That would be a real jobs bill to help real people, who are having real economic difficulties. Imagine that!
(Mr. Cain is currently a radio talk-show host. He is a former corporate executive and CEO)