Jobs, Jobs, Jobs

Date: Wednesday, April 30, 2003 12:36 PM

JOB DESTRUCTION NEWSLETTER

www.ZaZona.com

This article deals with my favorite subject - JOB DESTRUCTION!

Bush doesn't need a tax cut to produce 1.4 million jobs. He could do it
overnight just by deporting all H-1B and L-1 visa holders. The tax
revenue generated by putting Americans back to work could then pay for
all sorts of tax cuts and pork barrel spending - without increasing the
deficit.

You can comment on this article at the Unofficial Krugman website at:
http://www.pkarchive.org/
Click on "Message Board"

http://www.nytimes.com/2003/04/22/opinion/22KRUG.html?ex=1052705796&ei=1&en=7d2920c3ee83060f

April 22, 2003
Jobs, Jobs, Jobs
By PAUL KRUGMAN

Did you know that President Bush's economic plan will create 1.4
million jobs? Oh, and did I mention that the plan will create 1.4
million jobs? And don't forget, the plan will create 1.4 million jobs.

Republican politicians are obviously under instructions to push that
job number. On the Sunday talk shows some of them said "1.4 million
jobs" so often that it sounded like an embarrassing nervous tic.

Of course, there's no reason to take that number seriously. Basically,
the job-creation estimate came from the same place where Joseph
McCarthy learned that there were 57 card-carrying Communists in the
State Department. Still, let's pretend that the Bush administration
really thinks that its $726 billion tax-cut plan will create 1.4
million jobs. At what price would those jobs be created?

By price I don't just mean the budget cost; I also mean the cost of
sacrificing other potential pro-employment policies on the altar of tax
cuts. Once you take those sacrifices into account, it becomes clear
that the Bush plan is actually a job-destroying package.

Not that the budget cost is minor. The average American worker earns
only about $40,000 per year; why does the administration, even on its
own estimates, need to offer $500,000 in tax cuts for each job created?
If it's all about jobs, wouldn't it be far cheaper just to have the
government hire people? Franklin Roosevelt's Works Progress
Administration put the unemployed to work doing all kinds of useful
things; why not do something similar now? (Hint: this would be a good
time to do something serious, finally, about port security.)

The answer is that we can't have a modern version of the W.P.A.
because, um . . . because tax cuts are essential to promote long-run
economic growth. Yes, that must be it. Just look at a new study by the
Congressional Budget Office, now headed by an economist handpicked by
the Bush administration. It concludes that the Bush plan may have
either a positive or a negative effect on long-run growth, but that in
any case the effect will be small. Wait, that's not the answer we
wanted. Quick, find another expert!

Meanwhile, the United States is in effect about to run a W.P.A. program
in reverse. That is, as a nation we're about to reduce spending on
basic needs like education, health care and infrastructure by at least
$100 billion, maybe more. And these spending cuts the result of the
fiscal crisis of the states amount to a job destruction program bigger
than any likely positive effects of the Bush tax cut.

Until recently it has been hard to get people excited about the states'
worst fiscal crisis since the Great Depression. For about two years
state governments were able to use fancy financial footwork to put off
the full effects, and the public probably regarded warnings about
looming catastrophe as exaggerated. But now, as Timothy Egan reported
yesterday in The New York Times, states are "withdrawing health care
for the poor and mentally ill. They are also dismissing state troopers,
closing parks and schools, dropping bus routes, eliminating college
scholarships and slashing a host of other services." Not to mention
unscrewing every third light bulb in Missouri government offices.
(Honest.)

Aside from their cruelty and their adverse effect on the quality of
life, these cuts will be a major drag on the national economy. So if
the administration really cared about jobs, it would provide an
emergency package of aid to state governments not to pay for new
spending, but simply to maintain basic services. How about $78 billion
the same sum just allocated for the Iraq war?

Oh, never mind. Anything that would distract from the tax-cut message
is out of the question. In fact, rather than compromise on its goal of
maximum long-run tax cuts for the wealthy, the administration now says
that it's willing to phase tax cuts in gradually making them even less
effective as an economic stimulus.

So when you take the policy consequences into account, it's clear that
the administration's tax-cut obsession isn't just busting the budget;
it's also indirectly destroying jobs by preventing any rational
response to a weak economy. In its determination to stay on message,
the administration is also determined not to do anything that would
actually help ordinary families.

But did I mention that the Bush tax plan will create 1.4 million jobs?

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