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December 06, 2010

Comments

"I'm not sure why the unemployment benefits only got extended for 13 months, but the tax cuts for 24, but I'm a bear of little brain. "

I was actually surprised at this, and pleased. keeping in mind it was 13 months for the 99 weekers. Thats great news compared to what had been thrown around and keeps us from arguin about it again in 13 or 26 weeks. In thirteen months maybe there will be some movement on unemployment figures that certainly wont be there in 3 months.

"The claim is that we will benefit due to the new jobs that the entrepreneurial class will create, however that does beg the question of why, since the rates in question exist now, they are not spurring wonderful growth and hiring now."

For better or worse russell, McConnells answer to this is exactly the same answer as Obamas answer on the success of the stimulus package: "Imagine how bad it would be if we hadn't done it."

I am not necessarily convinced by either but one is as provable as the other.

"The claim is that we will benefit due to the new jobs that the entrepreneurial class will create, however that does beg the question of why, since the rates in question exist now, they are not spurring wonderful growth and hiring now."

According to the folks at Fox News job creation has been stymied by the crushing uncertainty the wealthy have been living with about what their tax rates will be next year.

I have no idea if anyone actually buys that crap, or if they're too busy kissing rich guy ass and reflexively hating taxes to actually think about it all.

In thirteen months maybe there will be some movement on unemployment figures that certainly wont be there in 3 months.

From your lips to god's ear, as they say.

To be completely honest, I think the deal in hand (if it is in hand) is about as good as could be had given the political climate.

As I said upthread, it coulda been a lot worse.

Marty,

I am not necessarily convinced by either but one is as provable as the other.

No.

This is the most staggeringly expensive way to pass an unemployment benefit extension that you could possibly come up with, but if that's how the Republicans insist on doing it, that's how we're going to do it.

But I'm really not going to be sympathetic to anyone claiming that Republicans have any credibility whatsoever on deficit issues.

The other wonderful thing timing-wise is that the tax cut argument will come up again just in time for the 2012 general election.

Lovely.

Sorry BY but they are exactly equivalent, you cant prove what would have happened in their absence.

Marty,
When I was last taking physics, no one could prove that inertial mass and gravitational mass were always equal, but no difference had ever been observed. Not being able to prove what would have happened is not the same as not having excellent reason to believe we know approximately what would have happened.

" Not being able to prove what would have happened is not the same as not having excellent reason to believe we know approximately what would have happened."

True, but often reasonable people might disagree on those beliefs, particularly in economics.

The worst part of this is that the tax cuts are extended for 2 years rather than 13 months. If it's supposed to be a stimulus, vote it that way, up and down. The Dems could have forced this, and done the right thing next year, well before the election.

But nooo. For the Dems, it's always "thank you sir, can I have another."

True, but often reasonable people might disagree on those beliefs, particularly in economics.

which shouldn't give reasonable people any reason to believe anything an economist says...

And, of course, Obama, having negotiated this splendid deal with the Republican leadership, now gets to sell it to Congressional Dems.

The problem with this country is now what it has always been, and will always be: the left. Why can't they just go away (except for obediently voting 'correctly' every two years) and let Republicans and neoliberal Democrats (like Hopey Changey) do what must be done?

I have no freaking idea on earth how anybody lives on $290 a week

Wouldn't be hard at all for a single person.

I live in a medium to high cost city, and you can rent a room in a rooming house for around $100 a week in a fairly nice area - at least nice for the kind of areas that have rooming houses.

You can eat pretty well on $10 a day. And if you're poor and unemployed you can get clothes from charities for free.

So for food, water, clothing and shelter, we're up to $170 a week. When I was a contractor and had to buy my own health insurance, I had a policy with an enormous deductible and it cost me around $100 a month. So for $195 a week, you've got the basics plus health insurance.

The public library is free, and has internet access in addition to books and movies and music.

A bus pass costs $20 a week, so we're up to $215 a week. Still enough left to go to a movie or have a meal out or get a fifth of vodka or whatever every day.

I lived for a decade with a standard of living lower than that and the vast majority of people on the planet live their entire lives with a standard of living far, far lower than that.

Duff Clarity:

Well, that's something to shoot for, or at.

If you take a single lentil and say words over it, sometimes it will roll off the table and under the bed and in hot pursuit you'll run into a dust kitten, which can be tasty eating when dust-bunnies are out of season.

Also, the fuse to stick in the mouth of the vodka bottle for a bargain-basement Molotov cocktail can be made for free out of old shoelaces. Matches are free.

If you take the passenger seat out of a Toyota Tercel and pike your body a certain way, you can get a few hours of shut-eye before the cops roust you out. Free rent, free parking, keep moving.

Let us pray. Especially that nothing happens that might trigger that enormous deductible you've been saving up.

Incidentally, the base is not happy with the "deal":

http://www.redstate.com/moe_lane/2010/12/06/obama-retreats-on-tax-hike/

For Obama's "compromise", murderous, dick-sucking vermin like Moe Lane and his Census-worker-murdering boss Erick Erickson have nothing but words of encouragement, like "cowards".

Never trust a Republican. They'll welsh on any deal.

The 13-month unemployment extension is a mirage. Obama will give that up to the lying sewage called the Republican Party by March, probably in exchange for a mass butt-fuck of gay members of the armed forces, which I believe John McCain used to do for fun before he destroyed several planes and finally the Viet Cong set the fuck on the straight but unbelievably narrow.

The only good Republican is a dead motherfucking Republican.


"The best we could have hoped for..."? Yes, it could have been worse - we could still have 2 unpopular wars raging in Muslim countries, while surreptitiously fighting two additional wars in Pakistan and Yemen, the president could have retained his powers of extraordinary rendition and kept Gitmo open, we could still have DADT keeping patriotic gays and lesbians from serving our country... oh, wait. Nevermind.

Wouldn't be hard at all for a single person.

Not everyone is single.

Not everyone lives in cities where they can get around with a bus pass.

If you live in a rooming house, you will be f***ing hard put to eat on $10 a day, because you will have no kitchen.

You can buy a hot plate and a fridge, which will help a bit, but that will cost you money.

I've actually lived, as an adult, on $95.00 a week. That was in 1981-1982. So, about $240 a week now.

I rented a 10x12 room in a student house in West Philly. I shared a kitchen with about 6 other people. Once a week I rode my bike to the grocery store and bought the cheapest food I could possibly buy. Couldn't be more than two bags, because that's what I could carry back on the bike.

I planned out every single god-damned meal. I planned out my laundry loads.

My big treat, once a week, was a burger and a draft beer at a local.

So, yeah, if you're single, and you live in a city so you don't need a car, and you don't mind sharing bathrooms and kitchens with half a dozen of your closest friends who you just met that week, and you don't actually get sick in any significant way so that you don't have to actually come with the $$$ to make the deductible on your crap disasters-only insurance policy, you may be able to squeak by on $295 a week.

But personally, Duff, I think you're full of sh*t. I doubt you've lived that way for any length of time, because if you had, you would not be so f***king cavalier about it.

It's a shitty way to live. It was a shitty way to live as a healthy, single, 25 year old.

I can't imagine what it's like for a middle aged person, with kids, who's actually had a career, has accomplished some things in life, has actually made concrete, tangible contributions to the society as a whole, who will quite possibly never do so again, whose options in life are unemployment or a crap minimum wage retail or barista gig if they can find one and can put up with the BS that comes with it, and who is looking at five, or ten, or fifteen years of hand-to-mouth existence before Social Security and Medicare kick in.

Assuming they can stay healthy until then.

Can you?

Kindly try it on before you weigh in. If you don't mind.

Not everyone is single

And for those with dependents, there are many options in addition to unemployment. I considered the case of a single unemployed person because I have been a single unemployed person, and I know the numbers.

I doubt you've lived that way for any length of time

You can call me a liar if you want, I don't care. I lived that way as a student for years, and then when I worked manual labor jobs for half a decade for minimum wage and then slightly above minimum wage, I would sign up to go on unemployment when there were layoffs.

I certainly didn't get $290 a week on unemployment, even taking into account inflation. For much of the time, I didn't get $290 a week when I was working 40 hours a week back then, even taking into account inflation.

Looking back, I wasn't any happier or less happy then than now. I was happier getting unemployment checks and going to the library every day then I was stacking hundred pound bags on pallets all day every day.

I remember one thing that did make me unhappy back then, it was when I would work 40 hours a week doing tough physical labor and the people in the line at the grocery store paying with food stamps could afford food that I could not afford. I'm a leftist, but that really ticked me off, the same as it ticks me off to hear people say how hard it is to sit around doing nothing and getting a check that other people are working their butts off for.

Someone getting an unemployment check for $290 a week is getting a check for more money than someone working 40 hours at minimum wage is getting.

That's unjust. It's wrong.

Imagine that tomorrow some Congressman demands the following provision be included in the deal between Obama and the GOP:

Eliminate the 10% penalty on early withdrawals from retirement accounts.

Feel free to say whether that sounds like a good or bad idea, but my real question is: do you picture a Republican or a Democrat making that proposal?

--TP

I don't trust any 'deal' the GOP promises to make. there have been too many last second breaches of promise. Also, moving the tax question right into the 2012 campaign is about as stupid as possible. We can only hope that the GOPsters will all choke on their own laughter about how they duped the stupid cowards again. Was the circle of cowards above or below that of the greedy in the Inferno? To hell with the 'decorum' in Congress. I want some Dem with residual backbone to completely 'lose' it on the floor and another one using every 'bad' word from the dictionary without raising his/her voice to tell the GOP what they deserve. I can only dream about Pelosi using her gavel on Mitch from her position directly behind him when he speaks.

Someone getting an unemployment check for $290 a week is getting a check for more money than someone working 40 hours at minimum wage is getting.

That's unjust. It's wrong.

Yeah, it's wrong for a person working full time to make such crap wages. That's clarity.

Someone getting an unemployment check for $290 a week is getting a check for more money than someone working 40 hours at minimum wage is getting.

actually, $290 is exactly what someone working 40 hours at minimum wage is getting.

the current federal minimum wage is $7.25/hr.

oops.

Duff Clarity -

First, I'm sorry for saying you were full of sh*t. I was out of line, please accept my apologies.

Second, I'd like to propose that whenever folks discuss hard times they've lived through, that their student years be off the table.

College ain't life.

I work as a software guy now. I began that career when I was 27. Between leaving college and then, I worked as a warehouse guy, construction day laborer doing tear-outs and simple framing and roofing, bookstore clerk, and about four different kinds of janitor.

So, maybe a similar curriculum vitae.

Yes, it's possible to work a minimum wage job and have less in your pocket than some folks who receive public money. And yes, all other things aside, that is unfair.

I personally would say that the unfairness has more to do with how wealth is distributed than it does with lazy welfare cheats, but that is, perhaps, off topic for the moment.

What is probably on topic is that, in the big picture of what's just and unjust, it's pretty small potatoes as far as injustices go.

Further, I will suggest that, in discussions of public policy, focussing on some guy who spent public money on pie when all you got was bread is sort of an act of straining out a gnat and swallowing a camel.

Not disparaging your personal experience of it, just saying there are likely bigger fish to fry.

The unemployment benefits that were extended were for folks who have (or will) run out the current 99 week limit. The long-term unemployed we're talking about are not healthy young people in their 20's, just out of college, looking for their first jobs and trying to establish themselves in the economy.

Those people are hurting too, but they are less likely to be out of work on a long-term basis. The folks who, disproportionately, make up the *long-term* unemployed are older, 45 years and up.

Many of them are well-educated, and have been laid off from, not just jobs, but careers. A very large number of them *will never regain their former earning power*. A large number of them *will never work again, period*, because people don't want to hire folks who are into or past middle age.

Those people have homes, which they will lose. They have kids, who they have to feed and clothe, and a lot of those kids will not be going to college. Some of those kids will be going to live with relatives.

If these folks have any savings, they are going to deplete those, and then they will have years if not decades to get through, somehow, before they reach an age when they can qualify for SS or Medicare.

For those folks, $290 a week is not really a sufficient amount of money. By "sufficient", I don't mean they won't be able to eat, I mean it will not afford them a way to become productive again. It may keep them, literally, alive, and I'm sure they're happy to have it, but it will not get them back on their feet.

They are going to be financially wiped out, period, and most likely for the rest of their lives, period. Not because they are lazy, or unmotivated, or have bad attitudes. These are some of the most productive people we have. They're being wiped out because a bunch of [email protected] chiselers lied their @sses off in order to make themselves obscenely rich, and they blew the economy up.

And that $290 a week is not for life, it's for another 13 months, at most. After that, they're on their own.

That is unfair and unjust.

And not just unfair and unjust to them. It is, straight up, a pure and literally unmitigated waste of productive human capability. It's the potential productive output of 15 million people, flushed straight down the toilet.

It's a profound, staggering, tragic waste.

So, I feel your pain, but I feel theirs more.

When I was last taking physics, no one could prove that inertial mass and gravitational mass were always equal, but no difference had ever been observed. Not being able to prove what would have happened is not the same as not having excellent reason to believe we know approximately what would have happened

Except you can verify these things by experimentation, in the case of mass. Or at least, repeatedly fail to refute the hypothesis that there is a difference between the two.

If you're going to compare economics and physics, I'm going to have to drag Heisenberg into the discussion.

Delong's argument basically boils down to don't contradict Milt Friedman, I think. By analogy, Delong is saying that we ought to have bought off on all of Einstein's thought experiments before they'd been demonstrated to be compliant with how the world works. Just because Einstein was brilliant, and was right a lot of the time, and his thought experiments seemed to have some logic to them.

Slarti,

Fair criticism. The DeLong piece was what I found after a quick Google and doesn't, in itself, establish the point.

It does establish, however, that the notion of jobs saved by fiscal policy is not some wild idea that came out of the White House PR office, but is rather a somewhat conventional notion accepted as a matter of course by even such a non-liberal as Friedman.

I'll try to find stronger explanations, but remember that the claim is simply that employment is related to spending levels. Businesses hire when they have customers. I doubt anyone would be surprised by statistical evidence supporting that.

As for McConnell's claim, I wonder what evidence there is that a small tax increase on our top earners will be a significant drag on investment. Is A-Rod going to fire his maid?

Less snarkily, only a small percentage of potential investors would be affected, and the effect will be small. Let's say that you have so much money that the increase hits effectively all your income, rather than just a small fraction of it. In other words you're in the top 1% or less of income. You're considering an investment that now might return 10% after-tax. Under the new regime that will be reduced to 9.6%. Will that influence your decision? Maybe, rarely, if right on the edge, but for the vast majority, given the inherent riskiness of business investment, it's noise.

But I'm really not going to be sympathetic to anyone claiming that Republicans have any credibility whatsoever on deficit issues.

The Republicans will take credit for cutting taxes, while blaming Obama for the resulting increase in the deficit. This line will be dutifully parroted by the right-wing echo chamber until it achieves the status of truthy conventional wisdom and is absorbed into the mainstream discourse.

Then the Republicans will demand that Obama "finally get serious about spending" (read: time to eviscerate Social Security, at last!), and he will happily comply, in a spirit of bipartisan comity.

In response, David Broder will write an entire column consisting only of orgasmic grunts and moans of ecstasy.

Then the Republicans will run in 2012 on the claim that "Barack Obama wants your granny to starve to death" [optional addendum: "because she's white, and he hates that"], and clean up.

The End.

Works every time.

As for McConnell's claim, I wonder what evidence there is that a small tax increase on our top earners will be a significant drag on investment.

in the Church of Laffer, evidence is superfluous, an insult, a crime. all that is required of Real "Conservatives" is faith in The Great Curve.

(no, not that Curve)

No matter where tax rates are at the time, we are always epsilon to the left of the peak of The Curve. Any movement to the right will drastically reduce economic activity. Moves further left are always good.

Maybe this is the best they can do - I don't know. I'm sure that they're trying. But I'm hoping that somehow, the progressive Dems hold out to repeal the tax cuts (at least for the rich, if not for everyone), or that Bernie Sanders or somebody puts a hold on this. Unemployment insurance surely needs to be extended, and maybe they really wouldn't do it without the tax concession, but people are going to need to take to the streets eventually, or it will be death by a thousand cuts.

So, yeah... the 2012 election will be about the tax cut expiration (err... make that "the Democrat Plan to Raise YOUR TAXES!"). Oh, joy.

And the deficit/debt issues are kicked down the road some more (though, admittedly, while I want a plan, I want it enacted in the medium-term, not *right now* with ~10% unemployment).

Meh.

Someone getting an unemployment check for $290 a week is getting a check for more money than someone working 40 hours at minimum wage is getting.

That's unjust. It's wrong.

It's also a statement that is alarmingly ignorant of how UI benefits are actually calculated, at least in my direct experience. Someone getting an unemployment check for $290 a week was not working for minimum wage, and they were paying into the system far more than someone who was.

Someone who does in fact work full time for minimum wage will not be getting the same in UI as someone who made $40k a year if they lose their job.

There is a ceiling and a floor to benefits, but they are tied to how much you were making previously.

I'd echo russell's observations on the lack of merit in the remainder of your points as well.

There is a ceiling and a floor to benefits, but they are tied to how much you were making previously.

MA, where I live, has what appear to be about the most generous benefits in the country. The range here is from $32 up to $900 a week. I'm guessing folks who were making minimum wage before being laid off are getting the $32.

Anecdotally, I was laid off in '04. I was out of work for 3 months. My benefit was about 1/4 of what I had been making when I was laid off.

Unemployment benefits are taxable income, and all of these numbers are pre-tax, so if you're making minimum wage, what you end up with in your pocket is even less than $32 a week, in MA.

In my county (Essex, MA), studio-plus rentals (one big room, a bathroom, a kitchenette, figure 450-700 sf total) start at about $700/mo. That is not in the burbs, it's in Chelsea, or Lawrence, or Everett.

That's pretty liveable for one person or a couple. It's getting cramped if you have kids.

$32 times four is less than $700. If you can qualify for Section 8 assistance, you can find subsidized places cheaper. If not, then not.

If you don't have a job, it's freaking tough out there.

I'm kind of with Count me--in (although I don't mean it as a threat).

Theres one thing tht should be added to the discussion of how we benefit by lowering taxes on the rich because they run out and build factories, etc. with the money.

Business growth and hiring, as I've said repeatedly here, is stimulated by demand. If you have lots of customers you think about expanding. Of course you need money to expand, but that's what financial markets are for. What they are supposed to do is let businesses expand even if the owners can't finance the epansion out of their pockets. They do this by directing savings, one way or another, to real investment opportunities.

Now, this can be complicated, and getting financing is not generally easy, but it does happen every day. If there are legitimate promising investment opportunities there are ways to finance them without relying on personal wealth. It's strange to see a lot of free-market advocates express so little faith in the ability of financial markets to do their job.

Anecdotally, I was laid off in '04. I was out of work for 3 months. My benefit was about 1/4 of what I had been making when I was laid off.

Similarly, I went on unemployment in '02 and '03 when my contract work ended unexpectedly, and my WA state UI benefits were tied to the wage I'd been making as a contractor at Microsoft et al, which was in the neighborhood of $20 an hour. My benefit, IIRC, was somewhere between $250 and $300 a week. At the time I was locked into the majority of a lease on an $900/mo apartment. There were simply no IT jobs to be had at the time, and I managed to just barely scrape by for a while, periodically losing power or phone because every benefit check involved a decision about which bills I could pay at the time. Retail stores and fast food wouldn't hire me because I was significantly overqualified and they had no reason to think I wouldn't bail for a better job as soon as I found one (and they were correct about that). At one point I did find a retail job that paid minimum wage, and it was only marginally more than my UI benefit had been--worse, because I was now working for minimum wage it dramatically reduced what my subsequent benefits would be.

In the end I had no choice but to break the lease on the apartment and move into a room in a shared apartment in the University district. Most of what I owned went into storage and I lost some of that. I ended up thousands of dollars in debt from the broken lease. The only way I managed to get back on my feet was through a combination of family support and moving in with my girlfriend, and even then it wasn't until May of '05 that I found work in my field again.

We've come a long way in the last five years and are quite comfortable now, but I still get a flash of rage anytime I hear someone breezily opine about how it's perfectly doable to live on unemployment benefits.

The Republicans will take credit for cutting taxes, while blaming Obama for the resulting increase in the deficit.

Right you are.

Gold star for whoever finds the first cite of someone doing exactly this, I'm happy to bet it's out there somewhere right now, before the deal is even done.

R's suck at governance, but they know how to sell their party line. Everybody's good at something.

•Reinstating inheritance tax as planned, but hold to 35% on estates over $5M

That's pretty close to what I would have suggested for an estate (not inheritance) tax "fix," though maybe with a lower exemption and tying the rate to the maximum individual tax rate. Also, would make anyone who inherited property take a step down in basis to zero (rather than the current step-up to FMV, which is wholly unjustified AFAICT).

We've come a long way in the last five years and are quite comfortable now, but I still get a flash of rage anytime I hear someone breezily opine about how it's perfectly doable to live on unemployment benefits.

And I get a flash of rage when someone complains about how hard their life was for the few months that they lived the way I lived for a decade, and the way that the working poor live year in and year out and decade in and decade out.

I get a flash of rage when people claim to have no freaking idea how people on unemployment live, when those people live better than the way tens of millions of Americans live every day, decade in and decade out.

I know, I know, only your pain is real.

And I get a flash of rage when someone complains about how hard their life was for the few months that they lived the way I lived for a decade, and the way that the working poor live year in and year out and decade in and decade out.

Oh, how cute! He does other fallacies too.

Your mistake is in assuming that an anecdote about one of the periods when I was drawing UI represents the sum total of my experience with being working poor. You couldn't even be arsed to read closely enough to know that the anecdote in question represented more than two years of joblessness, not "a few months". Helpful hint: try subtracting 02 from 05.

You don't know the first thing about my life history beyond that anecdote, and your assumptions make you look like a massive jackass. Stop digging while you're behind.

I get a flash of rage when people claim to have no freaking idea how people on unemployment live, when those people live better than the way tens of millions of Americans live every day, decade in and decade out.

Again, that's an awfully cute bit of rhetorical reversal, but it's completely orthogonal to any argument I was making. Might want to brush the straw off your keyboard before typing anything else and further beclowning yourself.

Theoretically the demand could be outside the US while the production is inside. Then companies could expand even if there was no demand in the US (because the poor don't have money and the rich won't buy crappy American products).
How do you think the sweatshop system works in other countries?
Maybe it is the longterm GOP plan to change place with China with the new Chinese middle class buying low quality lower price from sweatshops in Flyovercountry, US. The powerful already have their kids learn Mandarin from their nannies with PhDs (and a background check that the nanny speaks with an upper-class accent, not Shanghai harbour dictrict).

Why not take that 80B and dedicate it for unemployment each year?

TAX THE RICH.

Make it your mantra

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