by: Dean Baker and Sarita Gupta, t r u t h o u t | Op-Ed
http://www.truth-out.org/tax-breaks-are-not-sufficient-restore-employment63749This is for good reason. In the short term, spending from the government is making up for the lack of spending from the private sector. The reason that so many people are unemployed is that spending by the private sector plummeted after the collapse of the housing bubble. Construction spending has been cut by more than half. Consumption spending is also a way down, as homeowners who lost trillions of dollars of housing equity realize that they must now save more. Spending to create jobs will simply be filling the hole left by these cutbacks, making the economy stronger, not weaker. Leaving people who want to work without jobs is simply a waste from an economic standpoint.
Over the longer term, we will likely need more revenue. The best place to look for money is the root of the crisis: Wall Street. A modest tax on Wall Street financial speculation can raise an enormous amount of money, by some calculations more than $150 billion a year or more than $1.5 trillion over the next decade.
This tax would have very little impact on the sort of investing that middle-class people do to save for college or retirement, but it would impose a substantial cost on fast-paced financial speculation. The money raised would go a long way toward funding a serious jobs agenda.
With the unemployment rate more than double its pre-recession level, jobs should be at the top of the national political agenda. Tens of millions of people are suffering each month that the downturn persists and the pain gets worse over time. What makes the situation more infuriating is that this crisis was entirely preventable if the people running economic policy had done their job. In the same way, we can get the unemployment rate down to more reasonable levels if Congress would just do its job.
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