Real Action to Reduce Unemployment: Eliminating Minimum Wages and Suspending Payroll Taxes

Americans’ top concerns these days are unemployment, deficits and debt. The rate of unemployment seems stuck at a level economically and ethically unacceptable, and efforts to bring it down appear ineffective and extremely expensive, especially in the context of runaway deficits and debt. It’s time to re-evaluate government policies. A good place to start is minimum-wage laws, with payroll taxes a logical second. Alone, wage floors create more problems than they solve, and all of these unintended consequences are compounded by the extra burden of payroll taxes, which raise employer costs even further while also reducing employee take-home pay.

MINIMUM WAGES In May of 2007, during the Bush ...

Two Plus Two Is Four — Or Is It? Obama’s Health Summit

Health Care Reform was supposed to be on the operating table for all 7.5 hours of last week’s bipartisan Health Summit. But was it? And how many of the Congressional surgeons were practicing economics and how many were specializing in politics?

Some came to the table quite skeptical of any purpose beyond the PR, useful for themselves as well as for their President in this widely televised event. Obama was widely criticized for releasing the Obama-Biden “Plan To Lower Health Care Costs and Ensure Affordable, Accessible Health Coverage for All” 3 days before, not after, this big event. “How,” his detractors queried, “could we believe that he really wants ...

National Debt IV: Making Seniors More Secure

Early Record-Keeping for Social Security

On February 18, shortly after submitting a $3.8 trillion budget with a $1.6 trillion deficit for 2010, President Obama officially created the bipartisan National Commission on Fiscal Responsibility and Reform. Co-Chairs of the commission are Democrat Erskine Bowles and Republican Alan Simpson. “Everything,” President Obama said, “is on the table.” Nothing is apparently out of bounds – not even increasing taxes, tackling and taming entitlements.

Here’s what Mr. Simpson had to say about Social Security: “[Y]ou have two choices with Social Security. You either – you either raise the payroll tax or ...

National Debt Part III: Radical Reform of Social Security

Radical Reform of Social Security requires starting at the root, and that root is its real purpose and goals today, in 2010. What are we really trying to accomplish with this program? What are the basic problems for which we should supply social safety nets, and how do we best supply and sustain them?

2010 is more like the 1935 of Social Security’s birth during the Great Depression than any other time in American history so far. It is a time of Great Recession, when macroeconomic events have created new poverty and exacerbated old. Unemployment has destroyed wage income, and plummeting stock markets have devastated savings from ...

Addressing National Debt by Reforming Social Security

FDR Signing Social Security Act August 14, 1935

Government deficits and debt have reached alarming levels today, and the unfunded liabilities of tomorrow are even more staggering. The key to attaining fiscal sobriety is entitlement reform, and Social Security is as good a place to start as any.

Established in 1935, in the midst of the Great Depression, Social Security was FDR’s strong response to the difficulties experienced by the elderly, ...

Blind Men and Elephants in the Room: How Much Should We Worry about the Public Debt?

President Obama is expected to announce today a $3.8 trillion budget with a $1.2 trillion deficit for FY2011. Here’s the context within which he will reveal his plan. For decades now, the federal debt acquired through years and years of deficit spending has been the “elephant in the room” – the huge presence nobody talks about but everyone knows is there. In last week’s State of the Union address, however, debt joined unemployment as the two most urgent issues facing America as Obama enters his second year as our President.

Last year, the White House and Congress went “Keynesian” in a big way as the real-estate bubble popped and ...

Plain Dealing in Ohio: Obama Goes to Battle in Elyria

“Hello, Ohio!” Barack Obama began his speech in Elyria on January 22. “Everybody, please,uh, please, uh, please relax. We’re going to be here for a little bit…”

The content and tone of this speech were not, however, designed to relax. The intent was rather to go populist, go angry, and “pivot” policy attention away from Massachusetts and to the Midwest and the Main Street issue of jobs — or lack thereof. Orator Obama went into warrior mode almost immediately. And there he stayed.

Combatants included the usual villains — Big Banks, Insurance and Pharma. Nothing new here. But Obama also took some folksy ...

Taxing Wall Street with Righteous Wrath: Please, Can We Be More Aware and Less Angry?

Two Thursdays ago, President Obama announced a new policy: imposing a “Fiscal Crisis Responsibility Fee” on Wall Street.  The title is both shifty and judgmental, with the judgments based more on emotion than on fact.  The fee is actually a tax. And it’s being levied on only a subset of those responsible for our recession: the ones it’s so easy to hate.

Obama says that his “Responsibility Fee” is designed in part to help the Treasury recoup its losses on its “Troubled Asset Relieve Program” (TARP), the dramatic effort started by Bush 43 and continued by Obama to unfreeze credit during our recession. The program began with loans, not gifts, to the ...

“A Lot of Important Things Became Unimportant Today”

Haiti has been hit by an earthquake registering 7.0 on the Richter Scale.  This magnitude combined with geology and poverty to devastate the country. Haiti is situated over two fault systems, in a boundary region separating the Caribbean and North American plates.  The earthquake’s epicenter was only 6.2 miles below the surface, so the violence caused by plate tectonics wasn’t attenuated by depth, and the earthquake was more powerful than the scientific rating of its scale would otherwise imply. Even the presidential palace was destroyed, and it was built to code.  Poor people can’t afford to build to code, and 80% of Haiti’s population is poor. Poverty exacerbated the damaging force ...

Taking Stock: Grading Obama’s Domestic Economic Policies His First Year in Office

Barack Obama became America’s 44th President in troubled economic times. On the home front, his “conservative” predecessor had authorized spending that created a deficit of $l.3 trillion. Real-estate markets, stock markets, and financial markets collapsed. Advanced economies run on credit, and credit seized up. The United States entered a recession and feared it would be a deep and long one.

Economic doldrums, of course, helped make it possible for a newcomer to become President against the odds and the insiders. Now they make it harder for him to govern, even though they also contributed to creating strong Democrat majorities in both House and Senate. Immediate concerns over rising unemployment ...