January 10, 2004
All Those Jobs
Today's NYTimes has a story about how Bush is focused on job creation:
Bush Seeks Ways To Create Jobs, And Fast.
The latest spin is without Bush's tax cuts, the situation would be much worse:
"Without the passage of the president's plans, by the second quarter in 2003, the unemployment rate would have been nearly one percentage point higher," Treasury Secretary John W. Snow said earlier this week. "As many as 1.5 million fewer Americans would be working, and real G.D.P. would have been as much as 2 percent lower."
Some economists believe that the tax cuts still can have a potent punch:
President Bush may also have an ace in the hole. Last year's tax cuts are expected to produce another big bulge of tax refunds and lower tax bills between now and June - about $40 billion in extra cash flow to households, according to economists at Goldman Sachs and Macroeconomic Advisers.
I bet that those tax cuts are going to do wonders for the luxury market, just like we saw during the Christmas shopping season. That should create some more good jobs, right?
Bush also says that the job reports shows it is very important to extend the tax cuts that are due to expire next year. This, of course, will continue to provide many, many more new jobs.
Not to be missed: Bush's 2003 economic stimulus package has proven to be a very expensive way to create jobs. As Krugman noted last April, to create 1.4 million jobs, the cost to the US tax payer was pretty sizable:
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?
Since only 239,000 jobs were created by this latest tax cut, by my estimation, the cost per job was a mere $2.18 million.
Reading assignment from the archives: Brad DeLong and Paul Krugman on Bush's 2003 job creation plan.
Posted by Mary at January 10, 2004 07:44 PM | TrackBack