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On Taxes and Coming Out of Recession


This is a short piece about taxes and jobs. One would hope that this blog is not the only place where there is a serious call for all Americans to begin to call, write and even assemble and march to the offices of our elected officials to lobby for for jobs. We need jobs desperately and we can have jobs. All we need to do to restore the economy completely, over the next two years, is to create jobs.

We need the government to create 5 million jobs over the next 6 months. Of course that raises several questions. The first, of course, is why 5 million? Here is the reason. When we were in the Bush era, at the end of 2007, the speculative era in Wall Street was being cut short by the failure of so many sub-prime mortgages, which had been used as investment vehicles…mostly traded between banks, here and abroad.

At that time we had about 7 million unemployed. These are rough numbers. By the end of 2008, we had lost something like another 5 million jobs in one year, had a tremendous stock market crash and huge government (still under Bush) interventions to save the financial community from taking us into a full blown Depression. That caused a severe loss of jobs, 600,000 jobs or more a month…the scariest situation that any businessmen over 60 had ever seen…and that means it goes back to the Johnson era. Very scary. That lost us another 3,000,000 jobs before we could get it started. All told:15 million people unemployed, If it is 9.5% of the active workforce, it should be a little less than that…say 13,000,000.

But here’s the point. We need to create 5 million jobs just to get back to normal high-unemployment levels. But that would be ok in this instance because we would be doing so with momentum. We live in a service economy. That is, 80.6% of our jobs are service jobs. They don’t originate anything, they merely provide services to other service workers…the flower shop owner who comes into the coffee ship for coffee. So, some people will say that, once these jobs are gone…5 million jobs, each for one year…those people will be out of work. That may be true, but in the meantime, business will be up, (we are a service economy remember), new jobs in the private economy will be started, banks will do some lending, and the tax picture will begin to close up the deficit a little. And the cost?

It will cost $200 billion. How do we pay for it? Two ways. First, we cut military spending by $100 billion of their gigantic $700 billion budget. Second, we shut down the Bush tax cuts; we let them all expire. That will restore taxes to what they were before Bush, and cut the budget deficit at the same time. We will gain the $120 billion each year that we would have taken from the Treasury, and we will add $120 billion in tax revenues. Of course only working people pay taxes.

So this would come from those, and only those, who…in a huge recession…are employed and making a good living. They can be thankful that they have jobs at all rather than worrying how much they pay in taxes for the next ten years or until we put this Humpty-Dumpty budget back together. Besides, most of the taxes are paid by the wealthy and they have made out like bandits for the last ten years.

The $100 million from the excess in the military budget and the $120 billion from retiring the tax cuts will go on for at least ten years. But the jobs, the 5 million jobs the government created will retire at the end of one year. So how will we take care of that?

So here is what we would do. Two ways. First, we need to pass all legislation about domestic green energy production, clean air, and alternative transportation. Those industries will suck up about a million jobs of the 5 million…leaving 4 million. Then we need to end certain aspects of free trade. We have lost 5.6 million jobs to China and India that can be brought back here to the United states.

We can certainly close down import loopholes that allow U.S. corporations to make products in Asia using fifty-cent-an-hour labor…which is the ONLY reason these corporations are there…and make those products here…or….tax them heavily at port of entry or tax any profits more heavily on companies outsourcing jobs to other parts of the world. If U.S. corporations do not want to participate in this market, that is ok. We will let them go elsewhere and start new U.S. corporations to replace those products.

That second part will create another 1,000,000 jobs quickly. How quickly? Ask any of your friends who were laid off because their customer service jobs were going overseas how long it took for them to be out of work? They will tell you it was often a matter of a few weeks. We can let corporations know that we expect the same timetable for American citizens being employed as when they were laid off.

So now we have a deficit of 3,000,000 jobs. Plus the seven, or about the same as we had at the end of the Reagan and Bush the First administrations. But it will get better. You see, everyone who follows government knows that we have a Neocon Party that is assisting the corporate sector in disguising a deliberate hold-up of investment. In return, large banks and investment companies are helping the Necons by holding up investment that would result in the creation of new jobs.

When companies like Fox give $1,000,000 to Republicans and zero to Democrats, when Target donates $120,000 in Minnesota alone to help defeat Democrats and when the Chamber of Commerce says that it has collected an astounding $75 million already from large corporations for this Fall’s elections, how much more do you need to know about thealliance between Neocon Republicans and corporations.

These people plan to lie about President Obama, to lie about Democratic policies, to say that we cannot let the tax cuts be retired or there will be flood, famine and pestilence. (The Neoncons are already worse that a plague of locusts. ) The fact is that a plan similar to the one described on this blog will work. It will not kill, harm, damage, injure or even seriously inconvenience most Republicans, but it will save many Americans from disaster, probably at least 2 million…and real disaster…homelessness, health, even potentially some starvation.

So when the Neocons get on the air, as Senator McConnell did on Sunday and said that we cannot raise taxes…he is flat out lying. He is a liar because he knows that what he says is not the truth. And when the Neocons say that we cannot create these jobs, they are wrong. We can. We have done it before…RFA and CCC camps. This time we should simply create jobs in existing government departments. They have offices all over the country and they all have needs similar to so many people who have been laid off.

We should do infrastructure work, but that need not be all we do. We should tighten up every department. Some of these jobs could be done merely to see by how many people these departments could be streamlined.

We can do it. All we need is to promote it to government and, if they don’t respond, then threaten them with something meaningful…like their own unemployment.

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