90.9 WBUR - Boston's NPR news station
Top Stories:
PLEDGE NOW
Big Budget Deal Could Break D.C. Impasse

With a deadline nearing for a Federal budget deal, we’ll look at what it’s going to take to get the deal done. Plus, we listen to President Barack Obama’s tribute to Nelson Mandela.

In this Nov. 13, 2013 file photo, House Budget Committee Chairman Rep. Paul Ryan, R-Wis., left, and Senate Budget Committee Chair Sen. Patty Murray, D-Wash., arrive at a Congressional Budget Conference on Capitol Hill in Washington. The two Congressional leaders are said to be close to finalizing a two-year budget plan. (AP)

In this Nov. 13, 2013 file photo, House Budget Committee Chairman Rep. Paul Ryan, R-Wis., left, and Senate Budget Committee Chair Sen. Patty Murray, D-Wash., arrive at a Congressional Budget Conference on Capitol Hill in Washington. The two Congressional leaders are said to be close to finalizing a two-year budget plan. (AP)

We’ve become accustomed to federal budget battles so hard fought, so brutal, that they shake the nation.  Shut down the government.  Send blood pressures spiraling.  This month’s budget talks have been different.  Very quiet.  Under cover.  Just two negotiators at the heart of the back and forth.  Democrat Patty Murray from the Senate.  Republican Paul Ryan from the House.  Hammering out the outline of a deal.  It’s not the deal to end all deals.  There is big tension over long term unemployment benefits and more.  But a deal itself is a big deal lately.  This hour On Point:  federal budget realities.

– Tom Ashbrook

Guests

Jake Sherman, Congressional reporter for Politico. (@JakeSherman)

Heather Boushey, executive director and chief economist at the Center for American Progress’ Washington Center For Equitable Growth. (@HBoushey)

Douglas Holtz-Eakinpresident of the American Action Forum. (@djheakin)

From Tom’s Reading List

Politico: Paul Ryan’s bipartisan budget moment? — “Over the next few weeks, as Congress pushes up against the December recess, Ryan’s influence in the Capitol will be put to a test. He will have to play a major role in convincing the same House Republican Conference that triggered a government shutdown to pass a budget agreement that doesn’t drastically change Medicare, Medicaid and other entitlement programs — the longstanding goal of Speaker John Boehner’s majority.”

Washington Post: Budget deal expected this week amounts to a cease-fire as sides move to avert a standoff — “The deal expected to be sealed this week on Capitol Hill would not significantly reduce the debt, now $17.3 trillion and rising. It would not close corporate tax loopholes or reform expensive health-care and retirement programs. It would not even fully replace sharp spending cuts known as the sequester, the negotiators’ primary target.After more than two years of constant crisis, the emerging agreement amounts to little more than a cease-fire. Republicans and Democrats are abandoning their debt-reduction goals, laying down arms and, for the moment, trying to avoid another economy-damaging standoff.”

Wall Street Journal: Lawmakers: Jobless-Benefits Fight Won’t Derail Budget Deal — “Several Democrats are pushing to vote on an extension this week in the Senate, though how to pay for it remains an issue. Congress has opted at times in the past to renew the 2008 benefits without offsetting their cost through tax increases or spending cuts. On the budget front, officials close to the talks have said Ms. Murray and Mr. Ryan are closing in on a deal that would allow spending of roughly $1 trillion in each of the next two years. The mid-October agreement to end the partial government shutdown tasked the budget group with coming up with a budget plan for the rest of the 2014 fiscal year by Friday.”

President Obama Pays Tribute To Nelson Mandela

Tens of thousands of South Africans gathered in the rain at a soccer stadium in Johannesburg today, joining world leaders to honor Nelson Mandela.  He died last Thursday at 95.  A roar of cheers met President Obama as he rose to speak:  “To the People of South Africa—people of every race and every walk of life—the world thanks you for sharing Nelson Mandela with us,” he said.

Please follow our community rules when engaging in comment discussion on this site.
  • OnPointComments

    If I were made king, there would be no Christmas recess for Congress unless the budget deal was made beforehand. But, then again, if I were king, there’d probably be a few beheadings of members of Congress too. So there’d be tradeoffs to declaring me the monarch.

    • Ray in VT

      Also be mindful that sometimes it doesn’t work out too well for the king. Charles I didn’t have it so well when he took on Parliament, and one Louis ended up a smidge shorter for his troubles.

      • Labropotes

        “We’re gonna take you and the Queen
        Down to the guillotine,
        And shorten you a little bit.”

        • MrNutso

          … it’s somewhere in the heart of town,
          And when that fella there is through,
          with what he’s gonna do,
          You’ll have no place to wear your crown

    • John Cedar

      If you were king, there would be no need for congress at all. You could just pass laws or repeal them with royal executive order. Kind of like…

  • Shag_Wevera

    This one’s easy. Righty wackadoos don’t have the cajones to try this stuff and piss off the electorate so close to the holidays. In a few months, they’ll be back to the same insane shenanigans.

  • Fiscally_Responsible

    Nothing of any consequence will be accomplished with this or any budget deal. The Democrats will continue to expand wasteful social, governmental pension, and other programs with Obamacare about to be the cannonball into the pool that splashes all of the water out. The biggest contributors to the deficit (entitlement programs, governmental pensions and ridiculously low retirement ages) will not be touched as the Democrats want to give away the store and use any proposal to change these plans (defer eligible retirement ages) to reflect longer life spans as a way to scream “fire” in the theater to the American peple. The Republicans will continue to support oil, military, and other special interests that waste mountains of taxpayer money. And we, the ordinary citizens that have to work everyday while trying to at least stay in place rather than being totally thrown off the speeding tread mill, will have to pay for it. And the burden ($17 trillion and rising) will simply be passed to our children.

  • John Cedar

    The GOP has the communist in chief, his loyal MSN and low information freestuff voters on the ropes. T’is time to shut down the guvmint again. Would be the best way to revisit and succeed on repealing/defunding Obamacare.

    • WorriedfortheCountry

      The GOP are an inept opposition party. They are on the correct side of almost every budget and economic issue and yet they continue to lose these battles.

      I’m sorry to say they are better off not fumbling the ball and win solid majorities in 2014 before they take on the ‘campaigner in chief’ head on.

      • John Cedar

        The ineptness of the GOP would not be a factor if it were not for the MSN wing of the party they are opposing. But that aside, fumbling the football is in the eye of the voter. Like the ones that sat on their hands and didn’t show up to vote for Romney. The seats in play and the reason they are in play are debatable, but one thing for sure is that congress’s overall approval ratings are irrelevant and only state and district ratings of individuals reps are relevant. The polling shows that GOP is not just right on economic issues but has the majority support on them. Which means social issues will once again determine the outcome. Social issues being code word for gay marriage, pro-misandry and infanticide rights.

        Until the MSN gives the GOP the same nod and wink free pass on gay marriage that they gave the donkeys up until last year, until they acknowledge that Texas restriction on late term abortion was more liberal than that of Europe, until they acknowledge that civil rights laws have helped women more than any other group. The republicans will be slandered in the MSN and loose more elections they they should. I don’t believe it helps the GOP to capitulate on reckless spending and will in fact hurt them. But that’s just my opinion …I could be wrong.

    • TFRX

      Pathetic.

      What do you sound like when you’re on your meds?

    • AlanThinks

      It is amazing to see the racism and hatred still alive in the US.

  • edrea

    I would think that ‘bipartisanship’ means giving a little by both parties, getting some things and making other sacrifices — not completely staying away from the hot-button issues. It should mean going in the direction of both tax increases and entitlement reform (to include tax reform and entitlement decreases).

    This budget deal amount to taking the metaphorical “easy sneak shoot” instead of actually negotiating the difficult rapid. If Congress were river-runners, we’d say they were too timid, attempting to run rapids beyond their skill level (or so it would seem).

    The nation shall stay perched in an untenable situation like a timid boater stuck on rocks, not sure what to do — until somebody in Congress gets enough heart and courage to push us through successfully.

  • HonestDebate1

    I don’t know the details but I suspect nothing will improve. A compromise between gargantuan government spending and huge government spending is a waste of time.

    • OnPointComments

      “Yes indeed, we are making a very clear statement that we cannot, cannot support a budget agreement that does not include unemployment insurance in the budget or as a sidebar in order to move it all along. It would undermine who we are as a country.”
      –Nancy Pelosi, 12/5/2013

      I wonder if Pelosi and other Democrats are willing to have another Democratic party government shutdown if they don’t get their way.

      “Nice little government you have there. It would a shame if something were to happen to it,” said Pelosi.

      Okay, I made that last quote up. Once again, to Democrats compromise and negotiation mean “do what I want and give in to our ultimatums.”

      • WorriedfortheCountry

        Poor Nancy as she watches her dreams to return to the speakership slip away. She really misses those weekly transcontinental private air force G5 booze flights courtesy of the American tax payer.

      • keltcrusader

        I think you have the parties switched. It is quite evident the GOP is the “Party of NO” and “its my way or the highway, damn the country if need be”

      • HonestDebate1

        Bingo.

    • Mike_Card

      Identify where you are getting too much government? Everyone is against waste, but most want jobs where they live. Why would people in the Gulf be in favor of cutting the FEMA budget? That’s just an example, not a marker.

      • HonestDebate1

        I could give you nearly 17 trillion reasons but I’ll go with Obamacare.

  • William

    There will be little if any real spending cuts and both parties enjoy the big budget spending.

    • OnPointComments

      2014 is an election year. Incumbents rely on big government spending to buy votes.

      • The poster formerly known as t

        How come military operations are not counted as part of big government spending?

        • OnPointComments

          Defense spending is absolutely counted as part of big government spending. Try to find any member of Congress who has proposed cutting defense department spending in his/her own district.

    • TFRX

      And only one of them gets anointed “fiscally prudent” no matter how much they waste.

  • hennorama

    FYI — Mr. Sherman is only discussing DISCRETIONARY spending.

  • wauch

    Has the military/Defense Department ever been asked to sacrifice? Clearly the NSA has way too much time on their hands spying on gamers and Germany’s Chancellor Merkel. We continue to construct conflicts to prop up military spending at the expense of everything else. Time to brink the troops home, put the reigns on Defense Department, and be honest with Americans about the trillions of pork contained within the defense budget.

  • jimino

    Well, one thing we know for sure is that the usual Republican playbook will be followed and calls for violating contractual obligations to working people and cuts to Social Security benefits that have been paid for in advance by those workers, so those job destroyers making over $250,000 don’t have to pay an additional marginal tax rate of 2%, or their government-dependent cronies in the financial sector don’t have to risk their own money and livelihood, will be its centerpiece.

    The only unknown is whether the low information teabaggers will finally see the light, realize those they helped elect have been and will continue to sell them out, and do something about it.

  • Fiscally_Responsible

    Obama has had five years of record government spending, TARP, big fiscal stimulus programs, cash for clunkers (not referring to Obamacare but older cars), shovel ready projects (not referring to the only shovel ready projects that I know of, namely the ones that my dog creates), quantitative easing programs, etc to fix the economy. We should not extend unemployment benefits yet again.

    • hennorama

      Fiscally_Responsible — why not?

      • James

        because as he so aptly pointed out, none of it is working!

        • hennorama

          James — thank you for your response.

          Please explain your conclusion, especially as related to F_R’s comment “We should not extend unemployment benefits yet again.”

          • James

            Extending unemployment, like the programs FR mentioned, is an act of government stimulus.

          • hennorama

            James — thank you for pointing out the obvious.

            Now if you could please explain how “none of it is working!” as you claim.

  • Coastghost

    When only lean bacon is for sale, what gymnastics of imagination can be performed to convince oneself that the bacon is fully larded?
    Democrats are losing their ability (to claim) to bring home bacon when the bacon arrives at the butcher’s stand already well-trimmed of excess fat. The butcher’s only recourse at this point is to offer thick slices or thin.
    Only svelte pigs and hogs remain on the feedlots: prepare for thin bacon.

    • hennorama

      Coastghost — do you think that the banning of “larded bacon” (read: earmarks) has led to the inability to make deals in Congress?

      • Coastghost

        It does sound as if they’ve found no institutional substitute, but I don’t know what style of horse- or pig-trading Congress permitted itself before the advent of earmarks.
        On another hand: we need not be enamored of the US Congress functioning as the dispensary of all Federal nostrums for social, economic, or political amelioration.
        Regardless: more cuts, not fewer, are on the present horizon and beyond the next horizon.

        • hennorama

          Coastghost — TY for your reply.

          IMO, the responsible thing to do is to both reduce spending and increase revenue. That double whammy goes a very long way toward balance.

          Of course, very little is likely to get done, other than an election year ceasefire.

          • keltcrusader

            The GOP absolutely hates earmarks *

            *(unless,of course, it is in their district)

          • hennorama

            keltcrusader — I don’t think the faux “hatred” of earmarks that you describe is limited to any particular political party.

          • keltcrusader

            True, yet they seem to be the ones who scream the loudest about it all the while making their backroom deals

          • HonestDebate1

            I agree as long as you aren’t equating revenue with tax hikes.

    • jimino

      So you suggest that the congressional districts represented by tea partiers lead the way and have all federal spending in their district eliminated to the greatest extent possible. Military installations; highways; federal offices; let’s do some serious trimming. Until that happens the demands of so-called fiscal conservatives are nothing but platitudes at best, and more likely outright lies.

      • Coastghost

        Sure: as long as we learn how states like Illinois and Michigan and California propose to deal with their fiscal circumstances, without having to appeal for (more, continuous, or enhanced) Federal assistance. (I’m all for states maintaining whatever responsible independence is possible from Washington, DC.)

      • Elizabeth_in_RI

        They can’t afford to! Most of the states with Tea Party reps are the states that TAKE more in federal dollars than they send. It is typically the blue states that SEND more tax dollars than they get. Sort of ironic isn’t it?

  • http://neilblanchard.blogspot.com/ Neil Blanchard

    Lots of faux news sock puppets commenting.

    • Bigtruck

      hey it’s a job

  • hennorama

    Wow. Caller Randy hit it on the head.

    Now we hear from Mr. Holtz-Eakin that “What’s at stake is only about 300,000 jobs.”

    What he neglected to point out is that is 300,000 jobs LOST if LT UI if long term unemployment benefits are cut off.

    No big deal, right?

    • Jeff

      If you seriously believe that paying people to not work creates jobs then you need to take an economics class. This reminds me about when Nancy Pelosi said that welfare benefits creates jobs…basic economics says that if you create incentives to do something, more people will do it.

      • http://neilblanchard.blogspot.com/ Neil Blanchard

        If you seriously believe that forcing people to be homeless, bankrupt, and hungry helps the economy, then you are simply wrong.

        • Jeff

          We’re talking about a temporary extended unemployment program…the standard welfare services are still available to anyone who needs them. Stop confusing your social programs.

          • http://neilblanchard.blogspot.com/ Neil Blanchard

            Unemployment is not welfare.

      • hennorama

        Jeff — thank you for your response.

        You mischaracterize the point. Mr. Holtz-Eakin pointed to the employment impacts, which are estimated as 300,000 FEWER jobs if this spending is taken out of the economy.

      • Elizabeth_in_RI

        Where are the jobs?? The vast majority of people on unemployment would desperately love to go back to work. But if there aren’t any jobs what are they to do? And please don’t say, “well McDondald’s is hiring.” We know that those jobs were intended for people without education and skills and do not provide a living wage that someone can support a family on (although perhaps if we stopped subsidizing McDonald’s and WalMart and all these corporations via the food stamp and other welfare programs that their employees are forced to be on since they pay so poorly maybe that would limit the supply of people willing to take those jobs and force them to pay better, hmmmm…)

        • Jeff

          I guess I just had a second interview last week…the jobs are out there and I’m finding some.

          • Elizabeth_in_RI

            Congrats and good luck.
            But I know many people here in RI (2nd highest unemployment rate state I think), many of whom have college degrees and experience that ARE seeking jobs or have been under employed and searching for better jobs. They’re NOT liars or slackers – they just want good jobs.

          • keltcrusader

            you guess, you can’t remember?

          • Jeff

            I drank a lot last weekend…

          • keltcrusader

            helleva employee you’ll make

          • Jeff

            You must be an amazing judge of character to determine that based on an online message board.

          • keltcrusader

            You tell everyone on here you can’t quite remember an 2nd interview for a job because you drank yourself into oblivion last weekend and you are wondering why people might think you are a bad risk as an employee? You put the message out there Bud for all to see, not my fault for judging you based on your post just like many employers would consider a binge drinker a bad risk.

          • Jeff

            Glad that you can understand a joke or sarcasm. Wow, you are thick.

          • keltcrusader

            not a thick as you are a drunk blowhard

          • Jeff

            Name calling, how adult of you! BTW, the company I had the interview with last week asked me back for a 3rd interview.

          • keltcrusader

            ahem, you started it, mr adult-like chld. maybe you should share with them your drinking and memory problems, I’m sure that would go over well.

      • LinRP

        Paying people NOT to work?????? Are you freakin’ kidding me? You’ve got yours, right buddy? You must have a job, and have never been out of work. That kind of comment displays ZERO lack of understanding of what it means to be unemployed for any length of time. A knuckle-dragging lack of understanding that is willful because, again, you’ve got yours. YOU are the one without a basic understand of the economics of the unemployed, as well as their mindset of wanting nothing more than getting back to work. That comment is shameful.

        • Jeff

          We’re talking about temporary, extended, unemployment benefits…we just had a great jobs report and unemployment is almost under 7%…the stock market is at record highs. If we can’t cut unemployment EXTENDED benefits now, then when can we cut them?

          If you disagree, then you must offer me an objective thing to watch for when we can eliminate this temporary program.

          That’s why all these government programs grow and grow. Everything starts out as a temporary fix and then people freak out when the “temporary” program/tax is to be cut and the program sticks around indefinitely.

  • Jeff

    There are a few common sense adjustments that could be made to Social Security to make it solvent for 100 years. Extend the age of benefits for SS by 2 years over 2 decades starting in 10 years (people age 55 and up will see no changes in SS). Then use chained CPI instead of regular CPI (this was an Obama proposal). Finally, increase the amount of money that is taxed through FICA to cover 90% of all income (it’s closer to 80% of income today), most estimates show it should be around $150k-$175k/year.

    If you want to spark business investment and open up the free market then we need tax reform. Stop picking winners and losers…just give all individuals a $20k/year deduction ($40k/year for a family with 2 adults) and eliminate all other credits/deductions. Then tax every dollar after that $20k/year tax free amount at 20% (including capital gains, which would count as the same under this tax plan). Have one more bracket of 25% on income above $250k/year. Have the same tax system for businesses (20% and 25% for higher profit businesses).

    Do those two changes and watch the deficit recede and the economy boom!

  • http://neilblanchard.blogspot.com/ Neil Blanchard

    The main question is not spending or not spending – but rather the right kind of spending.

  • Fredlinskip

    You mean to say that Congressmen are actually working with eachother – like negotiating-?
    You mean they’re not waiting for or manufacturing a crisis to act? They actually may come up with a budget??
    We are talking about U.S. government today, right?
    They are not out fund raising their campaigns somewhere, but are doing their jobs??
    Can this possibly be?

    • MrNutso

      This could happen only in … The Congressional Zone.

  • RolloMartins

    Post-Keynesian economics has been shown to work, contrary to what the conservative guest tells us. What doesn’t work, what is nothing but idiocy, is this Austrian model for austerity. Why does the Right hate the unemployed so much? And why do they persist in this silly notion of the importance of the deficit?

    • Jeff

      Wait a minute, the unemployment extension was supposed to be a temporary thing! We just had a great jobs report and unemployment is almost under 7%…the stock market is at record highs. If we can’t cut unemployment EXTENDED benefits now, then when can we cut them?

      • RolloMartins

        So just as the employment picture gets a bit better we choose to take a razor blade to it? Retail sales are less than expected. Companies still won’t even look at someone out of work for more than six months (or less). Yeah, so when somebody just starts getting up off their sick beds, the GOP answers, Cut him down at the knees! That’ll make him a better man!

        • Jeff

          That was a serious question, if we can’t cut the benefits now please offer another point in time when the benefits can be cut. Just give us all an objective point to measure against…not emotion, not feelings a real hard number we can look at.

          That’s why all these government programs grow and grow. Everything starts out as a temporary fix and then people freak out when the “temporary” program/tax is to be cut and the program sticks around indefinitely.

        • hennorama

          RolloMartins — Tom Ashbrook described it as “the red hot poker in the back.”

      • TFRX

        Nice trying to tie i nthe stock market with unemployment rates.

        How about cutting Extended UI when unemployment is below 5%, like in every other recovery since the Great Depression?

    • James

      Austrian?!?! You don’t have a clue.

      • ThirdWayForward

        Austrian School economic theory
        http://en.wikipedia.org/wiki/Austrian_School

        von Mises, Hayek, laissez-faire economics
        They are radical anti-Keynsians.

        • James

          and QE’s 1, 2, 3, and 4, the Recovery and Reinvestment act are all radically anti Austrian.

          Next to them unemployment is a drop in the bucket.

  • smaktcat

    I got out of the military, finished 2 degrees, and have been unemployed or under employed for 2 years. I haven’t shopped any where but goodwill and sav-a-lot for two fricking years. Couldn’t afford Cobra, so Have not been able to afford healthcare for two years! and since I live in Louisiana, a state that refused subsidies, I will get to pay 95$ for the privilege.

    • Labropotes

      What do you think we could do to improve things?

      • smaktcat

        I honestly wish I knew. Heck, I’d run for office but I gave up political correctness for honesty after I got out of the army, so I probably wouldn’t get too far. Thank you for the thought provoking answer though.

        • Labropotes

          If society isn’t serving the interests of people like you, one wonders who is being served. It’s ridiculous that all I can say is good luck.

  • Labropotes

    Caller Dave is right on.

  • MrNutso

    I wonder how the private sector jobs the TN caller mention compare to the government jobs. If the government job has better pay and benefits, why shouldn’t people want them?

    • Labropotes

      A business has to provide a product that people will voluntarily pay for, so they are limited in what they can pay workers. Maybe if we gave businesses the right to tax, or print money, they could raise wages.

  • Labropotes

    I am pretty sure Heather is just wrong. This chart shows that someone must earn well over minimum wage to beat sitting at home. (The yellow part is child care, so in many cases isn’t available.

    • James

      I’m positive Heather is wrong. Max unemployment is 400 a week, that’s way beyond minimum wage (after taxes) even if you work a full 40 hour week.

    • ThirdWayForward

      Re: child care, so in many (maybe most) cases all these benefits are not necessarily simultaneously obtainable.

      Even if we take the chart on its face value, there is some obvious misinterpretation going on here.

      The cliffs occur, it seems, because in the great state of Pennsylvania (whose legislature is Republican dominated) they cut off housing and food subsidies abruptly for incomes above $29,000 per year.

      If the benefits were graded with rising income, then there would be no incentives to earn less to keep one’s benefits.

      This is obviously socially counterproductive, but even in this case, it does not make rational economic sense for someone to have more children (few will do it because of the benefits they will get). The cost of having children is higher than the childcare subsidy, and eventually those kids will grow up and be in school (that subsidy disappears). Even with these (counterproductive) incentives, one is still better off in the longer run with having few children and getting a job.

      This is one of the reasons that all health insurance should support birth control access for those who want it. Unplanned parenthood costs our society a great deal of money and makes it much harder for the poor to enter the workforce and stay in there. The Right is completely schizophrenic about these issues.

  • Elizabeth_in_RI

    Hallelujah – your caller Charlie the newly educated truck driver has just stated the exact problem! 3 decades of failed tax policies – trickle down economics just doesn’t work! The super wealthy can only drive so many cars, use so many refrigerators etc.,etc. We need all of us buying stuff, using services, etc. to support the economy and keeping the largest part of the nation’s wealth in the hands of a small group of people is NOT the way to to do that.

    • Jeff

      We raised taxes on the rich…why do we still have a deficit?

      • Labropotes

        In 2011, those reporting over half a mil earned 1.35 trillion dollars and paid 318 billion dollars in income tax. The 2013 federal deficit is projected to be 900 billion. I’m sure we could find several 100 billion more annually in unfunded, unaccrued liabilities, so that even if we took all the income of the rich, down to the last penny, we would have a structural deficit.

      • Fredlinskip

        Many corps still pay zero.
        Lowering rates to lowest in American history occurred just before Great Depression
        Let’s try it again-
        What could go wrong?
        Economy buzzed right along with low unemployment after FDR bailed us until late 70′s.
        Reagan was elected, dropped rates and we immediately entered largest recession since Depression.
        Hmm. Seems to be a pattern here.

        Then Fed lowered rates from in the 20′s down to 7%, before Reagan admin was to make any economic gains.

  • WorriedfortheCountry

    Memo to the truck driver: Obama did raise taxes on the top earners. Still no jobs. Your thesis FAILS.

  • Gary Welch

    It seems that the only thing driving this negotiation is the fear that the sequester will hamstring the military budget. If we are going to let that drive the discussion, why not hold their feet to the fire? Prosecute sexual harassment and assault, stop stonewalling on PTSD health care, increase veterans’ benefits. Stop funding more weaponry, aircraft that have faulty design and contracts with companies that in turn hire the top brass to consulting contracts.

  • ThirdWayForward

    The über-rich need some skin in the game.

    They are the ones who control most of the nation’s economic levers. They own most of the wealth of the country and have by far the most political influence.

    Raise marginal income tax rates to 60% until the unemployment rate declines to below 5%.

    The problem would be solved very rapidly.

    • hennorama

      ThirdWayForward — that’s hilariously interesting, and of course completely impossible to achieve.

      What is achievable is linking the long term unemployment benefits to some level of unemployment. In other words, until the unemployment rate is reduced below a certain level, the benefits remain in place.

      • ThirdWayForward

        We need to expand the realm of the possible, to use our imaginations a bit.

        My suggestion is obviously not attainable in the current political climate, but historically the highest bracket rates have been higher than that.

        Politics can change very rapidly when large parts of society are directly affected.

        Another crash is possible — do we really think that the stock market is more than double in value what it was in 2008? None of the structural instabilities have been addressed (dark derivatives markets, too big to fail), and China has a looming real estate bubble that will send shock waves through international financial networks when it bursts. Things are not good now, but they could get much worse fast.

        The problem with unemployment insurance is that it is very patchy. You have to have had a “real” job with those benefits, i.e. not self-employed or a “contractor” in order to qualify. It does nothing for the underemployed, who are an even larger group than the unemployed.

        We need a system that is inclusive rather than exclusive, that can aid everyone in dire need. That is what we need to cope with boom-bust cycles.

    • Labropotes

      Congress is composed of the uber-rich or their lackies. The effect of your law would be to shrink the labor force to about 105% of the jobs available.

    • WorriedfortheCountry

      “skin in the game”?

      Hmmm. The CBO just released a report stating that the top 40% of earners paid 106.2% of all income taxes.

      How is that possible you say. Well, the bottom 40% paid negative 9.1% of income taxes. In other words they received an average of $18,900 in transfer payments.

      Yes, let’s have the ‘skin in the game’ discussion.

      http://cnsnews.com/news/article/terence-p-jeffrey/cbotop-40-paid-1062-income-taxes-bottom-40-paid-91-got-average-18950

      • Labropotes

        FICA is equal to income tax. The poor pay that disproportionately. But the gist of your comment is valid.

        • WorriedfortheCountry

          FICA goes to the ‘lock box’, right?
          Yes, everyone has ‘skin’ in the SS and Medicare game but that is a different discussion.

          • Labropotes

            Et tu?! Friend, you are deceived.

          • WorriedfortheCountry

            Deceived? Not hardly, but please explain.

          • Labropotes

            The money that was supposed to be invested was spent. In return, the “Trust Fund,” got a special kind of security backed, admittedly, by the full faith and credit of the USA, but the only asset supporting those securities is the ability to tax. We are indentured, or the cupboard is bare.

          • WorriedfortheCountry

            Well stated. False promises. Generational theft. But the SS unfunded liability is only $16T. There will be adjustments but the program will continue mostly ASIS for decades.

            Medicare is a different story.

        • HonestDebate1

          I don’t think they are equal because one is paying into a program that pays you back. I hate the term Payroll tax and consider a payroll tax cut nothing more than the hastening of the bankruptcy of Social security.

          • Labropotes

            What does a worker care what the missing percentage of his paycheck is called? As for getting it back, yes he as a claim on future workers. But look around. Those claims are kind of piling up.

          • HonestDebate1

            A worker should know what he or she is getting for their money. I am self-employed so I pay quarterly taxes. I write a check. If I get a refund it is only because I paid too much. Many people think their refund is a bonus and have no idea it’s their money or how much they actually paid. I just think the extra layer of bureaucracy adds to the confusion. The payroll tax operates in the same manner.

          • Labropotes

            I mean that if I get 75% of my gross income, I don’t care if the missing 25% is called income tax or SocSec contribution. By “getting it back,” I mean that my entitlement to a future benefit is effectively limited by a future society’s ability to pay. Nowadays, the Present is doing all it can to impoverish the Future.

          • HonestDebate1

            I agree with you in that context. But that’s my point about hastening the bankruptcy of SS. Also, Obamacare is causing Medicaid enrollment to explode and medicaid is already hopelessly unsustainable. Any proposal to actually address the problem is met with accusations of throwing grandma over a cliff.

      • ThirdWayForward

        The top 40% of earners (households with incomes greater than $60k) get a disproportionate share of US national income. They SHOULD be paying most of the Federal income tax. They get big breaks on capital gains, and the financial cons get carried interest deductions.

        All types of income should be taxed the same way.

        Exclusion of capital gains at death means that the big fortunes are never taxed on their capital gains — this costs the rest of us $50 billion per year and perpetuates an economic aristocracy.
        (CNN Money, “The 4 worst tax breaks”)

        The income tax does not reflect total tax burden. When you factor in payroll taxes and state taxes, the rich pay a proportionately lower share of their incomes (Buffet pays a higher rate than his secretary). When all taxes are considered, there are very few people who have negative tax rates (i.e. they get back more than they pay).

        The rich even have a larger portion of the national wealth. The national debt burden should be shouldered as a percentage of disposable national wealth (i.e. excluding housing and personal property), not income.

        Despite all the howling about the plight of the rich, they are doing the best, by far, in this economy and their shares of both income and wealth are increasing to historical highs.

        The last time we saw anything like this was in the 1920′s before the Great Depression. The skewed distribution of wealth is one of the structural factors that causes economic crashes.

        • StilllHere

          Laughable, they get big breaks and yet pay more than their fair share.

          • ThirdWayForward

            Someone struggling to put food on the table and a roof over their head should not be paying the same tax rate as the Koch brothers whose annual incomes are measured in billions.

            Is that what you would prefer, a flat tax?

            An extra 10% in income is highly significant in changing quality of life for someone at the bottom; for someone at the top, it makes no difference whatsoever.

            The über-wealthy don’t need the money (and it won’t make them any happier or saner than they already are).

        • Fredlinskip

          It may take another Depression for your message to sink in.
          Lucky for America that we had Bernanke, who had spent so much time studying Great Depression, to help steer us away from the shoals after recent financial crash.
          Otherwise we might be there now.
          Another GOP Prez might just do the trick.

      • DeJay79

        I would not call the top 40% the uber-rich. The comment is meant for the top 1% or even the top 1/2%.

    • Gerald Morine

      I can remember (faintly) the Fifties, when the highest income tax rate was 91%. That was one of JFK’s few victories, lowering that rate. In those days essentially no one paid such a rate, of course. People were “dollar a year” folks who took their money in long term capital gains, fishy land deals, etc.

      • Fredlinskip

        I’m game for bringing back “good old” 70% Kennedy tax rates on upper incomes.
        We could use the National Debt reduction.
        Perhaps this would allow some more badly needed infrastructure spending as well.

        • Jeff

          And yet we brought in more through individual income taxes (as a percentage of GDP) in revenue under Bush in 2007 (8.4%) vs during the Kennedy years (average of 7.9%). The tax rates don’t matter as much as the actual revenue brought in by the government.

          • jimino

            As does the fact that despite having to pay such amounts in federal income taxes, a tiny portion of people now receive and get to keep more of the gain produced by our economy and own more of its assets than ever.

          • Fredlinskip

            IMO, you do injustice to any discussion if you are going to use the absolute peak of the bubble years (as in an economy with no foundation about to self-implode) as your baseline.

          • Jeff

            How about the 2002 number of 8.1% right during the early Bush recession? Still higher than the early 1960′s even though the new tax rates were passed and we had a recession…how is that possible?

        • OnPointComments

          When commenters fondly recall the good old days under Kennedy, they always want the tax rates from back then on the upper incomes. Yet this fondness doesn’t extend to the tax rates on everyone else under Kennedy.

      • WorriedfortheCountry

        When they passed the first income tax in 1913 they promised the top rate would never exceed 7%. It only took them 4 years to break that one — big time.

        • Fredlinskip

          Common sense started to set in.

        • StilllHere

          We had a great economy in 1913-1917, we should go back to the top rate at 7%!

  • ThirdWayForward

    We could save $120 billion per year by getting ourselves out of Afghanistan — that money would be better spent at home, on veterans and others who need jobs.

    We could save $50 billion per year by ending the war on drugs — that money would be better spent on productive infrastructure.

    A universal jobs program, for which everyone who needs a job would be potentially eligible, would be much better than the patchwork solutions of unemployment insurance. There are far more people who are underemployed and who are not eligible for unemployment insurance.

    Job stability is what the vast majority of American workers need.

    • Gerald Morine

      The war on drugs and related criminal justice system are very job-rich whereas infrastructure is not. Shifting money as you suggest would increase unemployment.

    • James

      fantastic, then our national deficit would only be 510 billion dollars instead of 680 billion.

      Whew, glad you solved that problem.

      • OnPointComments

        The deficit would still be 680 billion. Every time a liberal says “We could save X dollars,” they always follow with “And here’s what we’ll spend that money on instead.”

        • jimino

          OK. Give us your numbers to totally eliminate the deficit and what you would cut to get there.

          • jimino

            Maybe one of you up-voters can help you respond to my inquiry. Or are you and they bereft of actual real-world ideas?

          • HonestDebate1

            Repeal Obamacare, return to 2006 level spending, undo the gazillion new regulations under Obama, eliminate the cap gains tax then stand back and watch the unemployment rate plummet and revenue skyrocket.

          • jimino

            So your idea is to allow people to liquidate their current investments, tax-free, with no obligation to reinvest in the economy. There is already a huge pile of idle cash on the sidelines. Thinking that adding to it be would be beneficial to our economy shows a profound ignorance of macroeconomic principles. Almost enough to fill a public radio comment section.

          • HonestDebate1

            Yes, it would motivate them to get off the sideline and put their money at risk. That’s what we need, if you want less of something then tax it.

          • OnPointComments

            Implement the recommendations that the GAO made in its report “Opportunities to Reduce Potential Duplication in Government Programs, Save Tax Dollars, and Enhance Revenue.” Potential savings: $100 billion dollars annually

            Eliminate the wasteful spending identified by Senator Coburn in his “Wastebook 2012″ report. Potential savings: $20 billion annually

            Senator Coburn’s Wastebook identifies only the 100 most egregious examples of waste. As you read the report, you realize that the government doesn’t hesitate for a moment to spend on totally silly things. I’d cut the budget of every department and agency in the report by 5%, and warn that any further frivolous spending will result in more cuts. I’d fire the people who authorized the spending. Potential savings: ?, let’s say $100 billion

            The Department of Energy was created by Jimmy Carter in 1977 to makes us energy independent in 20 years. It has failed. Eliminate the department. Potential savings: $26 billion annually

            Eliminate corporate welfare identified by the Cato Institute in its report “Corporate Welfare in the Federal Budget.” Potential savings: $100 billion annually.

            Eliminate the Department of Homeland Security, and have transportation companies provide their own security. Potential savings: $50 billion annually

            Eliminate Department of Agriculture crop subsidies. Potential savings: $30 billion annually

            Another suggestion from the Cato Institute is at

            http://www.downsizinggovernment.org/education/spending-cuts

            $300 billion in suggested spending cuts, and that’s the net after I added back Cato’s proposed reduction in food subsidies for needy families.

            Let’s say the total is $200 billion to eliminate duplication from my previous post. Now were up to $626 billion in annual savings.

            Revise the tax code to make sure that households with incomes greater than $50,000 pay federal income taxes of at least 15%. Potential additional revenue: $218 billion

            I spent 15 minutes and came up with $844 billion in deficit reduction . Imagine if someone spent some real time and got rid of all the waste and started requiring efficiency in government.

      • jimino

        Give us your numbers to totally eliminate the deficit and what you would cut to get there.

        • James
          • jimino

            So you’re fine with $680 or do you have no ideas beyond insults?

          • James

            well I did have some ideas, then I decided that would be faster, but it didn’t work.

            in summary
            cut military in half’
            end war on drugs
            end dept of education
            merge dept of interior and EPA
            end small business administration
            raise Medicare eligibility to 68
            cut Medicaid across the board
            raise retirement age to 70
            end emergency unemployment
            end mortgage subsidies

            among others

          • Labropotes

            This NY Times interactive budget puzzle might interest you guys. The options are limited, but it’s pretty neat.

            http://www.nytimes.com/interactive/2010/11/13/weekinreview/deficits-graphic.html

      • hennorama

        James — you fail to account for the increased revenue from various employment-related taxes, income taxes, and various economic outputs, as well as the reductions to various income support programs, such as TANF, Section 8, SNAP, etc.

        More jobs cures many ills.

  • StilllHere

    Without a deal, there is an incremental $20B sequester and CBO estimates fed discretionary outlays would decline by another $20B. Instead the deal would increase discretionary spending by $40B. A bad deal! Thankfully it doesn’t look like supplemental unemployment benefits will be extended again. Defense spending is flat. This budget puts off the hard choices again.

  • Jeff

    Okay, so we have a quite a few liberals demanding that we keep the current temporary, extended unemployment benefits going. My big question is if we can’t end the temporary program today then when can we end it? Give us an objective number to measure so we can have specific point to remove these temporary benefits in the future. This is the reason we have so many overbearing temporary programs that soon become permanent…everyone freaks out when we make a rational choice to remove a temporary program. Give me the number to look for liberals!

    • warryer

      It’s only temporary in the relative sense that it’s permanent. Shifting definitions and relativism are the weapons of choice for progressives.

    • hennorama

      Jeff — while I am not a “liberal” I will answer your question.

      Link the extended unemployment benefits to the unemployment rate. When the rate drops below 6.0 percent for at least three months, they can be eliminated.

      You could also do a phaseout, with some reductions when the rate drops below 6.5 percent.

      • WorriedfortheCountry

        It is reasonable to question the efficacy of the long term extensions. It is clear that what we have now isn’t working. Perhaps a compromise would be to tie any extension to enrollment to job training or company apprenticeship?

        • hennorama

          WftC – TY for your response.

          Your idea has merit, but the training ship has sailed long ago.

          Employers and government have both abandoned responsibility for training and retraining unemployed workers, especially the long-term unemployed.

          There is also the political problem, especially of how to fund it. Part of the problem is that all of the following have been redefined as “Welfare” by the Heritage Foundation and others:

          TRAINING:

          TANF Work Activities and Training (TANF is Temporary Assistance for Needy Families. The cash benefit is what used to called “welfare.”)

          Job Corps

          Youth Opportunity Grants Formerly Summer Youth Employment

          Senior Community Service Employment

          WIA Adult Employment and Training formerly JTPA IIA Training for Disadvantaged Adults & Youth

          Food Stamp Employment and Training Program

          Foster Grandparents

          YouthBuild

          Migrant Training

          Native American Training

          See:
          http://thf_media.s3.amazonaws.com/2012/pdf/ExaminingtheMeanstestedWelfareState.pdf (pgs. 6 & 7)

          http://www.heritage.org/research/testimony/2012/06/welfare-state-69-means-tested-programs-and-940-billion-in-annual-spending

          The US might be well served to steal some ideas from Germany. German companies and the government work together to maintain their competitiveness through worker training.

          After the German equivalent of high school, students apply to a private company for a two or three year training contract. If accepted, the government supplements the trainee’s on-the-job learning with more broad-based education in his or her field of choice, at a publicly funded vocational school. Usually, trainees spend three to four days at work and one to two in the classroom.

          At the end, the theory goes, they come out with both practical and technical skills to compete in a global market, along with a good overall perspective on the nature of their profession. They also receive a state certificate for passing company exams, a credential that allows them to transfer to similar businesses if the training company doesn’t keep them beyond the initial contract.

          Keep in mind that the students are being paid during this time by the training company. This also helps prevent students from entering school without job prospects, since they aren’t admitted unless an employer has offered a training contract. The risks of time and money spent are shared by the students, the training company, and the government, rather than the student taking the risk almost alone, as is done here.

          Thanks again for your response.

          • WorriedfortheCountry

            Sounds like the engineering program at Northeastern University in Boston. 3 quarters of traditional studies — 1 quarter on-job coop. 5 year degree program. Near 100% employment in your field at graduation.

            No government intervention necessary.

          • hennorama

            WftC – appreciate the reply.

            Neither the German system that I cited, nor the engineering program at Northeastern University directly address the issues of unemployment, especially long-term unemployment. My intent in describing the German system was to ideate longer term solutions to career and vocational training issues, in combination with some of the difficulties surrounding the costs of higher education.

            Your idea of linking the receipt of extended unemployment benefits with enrollment in job training or company apprenticeship programs, or perhaps even community college programs tailored to specific employer needs has merit, and is similar to some of the restrictions under TANF. (Citing Germany again, there are about 350 recognized skilled occupations in Germany with apprenticeship programs. See: http://www2.bibb.de/tools/aab/aabberufeliste.php/ BTW, it’s in German, so you might want to use translation software or browser add-on.)

            Again, the issues are both political and financial. How would these programs be funded? Would employers see benefits to the investment of their time, money and resources? Would there be jobs at the end?

            The phenomena that we are experiencing, in addition to a high overall unemployment rate, is a massive expansion of long-term unemployment. Here are selected data points from Nov. 2008 and Nov. 2013 (all of the Nov. 2013 figures are much lower than the peaks of the Great Recession):

            Number Unemployed for 27 Weeks & over (2.219 M in Nov 2008 vs. 4.066 M in Nov 2013)

            Average Weeks Unemployed (18.9 in Nov 2008 vs. 37.2 in Nov 2013)

            Median Weeks Unemployed (9.8 in Nov 2008 vs. 17.0 in Nov 2013)

            Of Total Unemployed, Percent Unemployed 27 Weeks & over (21.1 in Nov 2008 vs. 37.3 in Nov 2013)

            These post-Great Recession figures are unprecedented in the data since 1948 (the earliest figures available in the BLS site). As has been discussed previously, this is largely due to the nature of the Great Recession, as it was a balance sheet recession rather than the typical boom/bust recession.

            For perspective, the previous recessionary peaks of these measures were:

            Number Unemployed for 27 Weeks & over – 2.716 M in Apr 1983. The current figure is about 1.5 times this prior max

            Average Weeks Unemployed – 20.8 in Jun 1983. The current figure is about 1.8 times this prior max

            Median Weeks Unemployed – 12.3 in May 1983. The current figure is about 1.4 times this prior max

            Of Total Unemployed, Percent Unemployed 27 Weeks & over – 26.0 in Jun 1983. The current figure is about 1.4 times this prior max

            Notice that the prior max of “Average Weeks Unemployed” – 20.8 in Jun 1983, is lower than the regular maximum 26 weeks of UI benefits, but the Nov. 2013 figure of 37.2 is almost 1.5 times the regular maximum.

            That’s the real crux of the matter.

            See the charts below, which use seasonally adjusted FRED data:

          • WorriedfortheCountry

            Did they have the extended ‘super’ duper 99 weeks of unemployment compensation in 1983? Perhaps that is the crux of the problem.

            Regarding long term fixes, the first thing that should go is tax payer subsidized tuition and loans to unlimited numbers of ‘women’s studies’ students(and similarly unproductive pursuits).

          • hennorama

            WftC – thank you for the reply.

            You may not be aware of this, but since February 2012, the maximum is 73 weeks (93 if a state can offer Extended Benefits). No part of the US currently offers 93 weeks, and the 73 weeks max is available at present in only the states of Illinois, Nevada and Rhode Island, and also in Puerto Rico and the Virgin Islands. 20 states and D.C. have 60 to 63 week maximums, 8 states have 54 to 57 weeks, 18 states have 40 to 49 weeks, and

            North Carolina brings up the rear with 19 weeks maximum, despite having one of the highest unemployment rates in the U.S. NC’s 2012 average unemployment rate was 9.5 percent, and it has averaged 8.3 percent over the last three months.

            See:
            http://www.cbpp.org/cms/?fa=view&id=3164
            http://www.bls.gov/lau/lastrk12.htm

          • John Cedar

            Training* is a solution that addresses underemployment rather than unemployment. Call me optimistic but I assume all adults are already qualified “training wise” for employment.

            *When some Japanese were visiting my last employer on an idea-sharing cooperative, they were puzzled and questioned why our training center building.was named such. “Dogs are trained,… people learn”.

            The powers that be, promptly renamed our “training center” the “learning center” and had multiple signs changed within a few days.

        • HonestDebate1

          That makes more sense than tying it to the U3 unemployment rate which is highly misleading.

      • Jeff

        What if the new “normal” unemployment rate is 6.7%? Here’s a nice article about the unemployment rate being at a new normal of 6.7% on average. Using your logic, we can only get rid of temporary unemployment benefits when we have a very good unemployment rate. We would be forced to increase and decrease these benefits due to the unemployment rate oscillating around the 6.7% number:

        http://www.frbsf.org/economic-research/publications/economic-letter/2011/february/new-normal-unemployment-rate/

        Even Obama has discussed the “new normal” of this unemployment rate…any thoughts on the new normal of 6.7% unemployment rate?

        • hennorama

          Jeff – thank you for your response, and the link.

          BTW, alternatively, we could link the extended unemployment benefits to something very logical, the Average Weeks Unemployed (18.9 in Nov 2008 vs. 37.2 in Nov 2013).

          The paper in your post, out of the SF Federal Reserve Bank and from back in Feb. 2011, was updated on August 6, 2013 by John C. Williams, one of the original authors, who states “The recent data do not change the main results of the original Economic Letter.”

          He also states “For comparison, the median response to the question about the level of the natural rate of unemployment in the August 2012 Survey of Professional Forecasters (SPF) was 6.0%.”

          See:
          http://www.frbsf.org/economic-research/files/el2011-05-update.pdf

          However, when we go directly to the “Economic Projections of Federal Reserve Board Members and Federal Reserve Bank Presidents, September 2013,” we find the following:

          “Central tendency[1] Unemployment rate: Longer run [beyond the year 2016] – 5.2 to 5.8 percent

          “Longer-run projections represent each participant’s assessment of the rate to which each variable would be expected to converge under appropriate monetary policy and in the absence of further shocks to the economy.”

          [1] The central tendency excludes the three highest and three lowest projections for each variable in each year.”

          See:
          http://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20130918.pdf

          And further, quoting the federalreserve.gov site:

          “What is the lowest level of unemployment that the U.S. economy can sustain?

          “Many estimates suggest that the long-run normal level of the unemployment rate–the level that the unemployment rate would be expected to converge to in the next 5 to 6 years in the absence of shocks to the economy–is in a range between 5 and 6 percent. Policymakers’ judgments about the long-run normal rate of unemployment in the Summary of Economic Projections are generally in this range as well. For example, in the most recent projections, FOMC participants’ estimates of the longer-run normal rate of unemployment had a central tendency of 5.2 percent to 5.8 percent.“

          See:
          http://www.federalreserve.gov/faqs/economy_14424.htm

          Thanks again for your response.

        • HonestDebate1

          6.7% seems a little low for the new normal.

      • brettearle

        Henn–

        If Extended Unemployment Benefits are eliminated, what do we do about the long-term and chronically unemployed who cannot meet the requirements of a safety net?

        • hennorama

          brettearle — this group of 1.3 million now, and another 0.8 million in 2014 can perhaps receive TANF and other benefits, but many will be SOL.

          As far as the BLS data are concerned, they will likely leave the labor force, which means that BOTH the unemployment rate AND the labor force participation rate (LFPR) will drop, making for complicated policy choices.

          The bottom line is that the just announced budget deal excluding any benefit extension abandons these people.

          • brettearle

            Thanks for the Reply.

          • hennorama

            Foisted with my own canard?

          • brettearle

            Poetic License does not include Theft.

          • hennorama

            Fair use is fair use, and fare-free.

          • brettearle

            Posted with one’s own Panache

          • hennorama

            That reminds me — gotta make pancakes for brekkie.

            [PS] maybe I should have written PanCaches? 20/20 and all yanno.

      • John Cedar

        I get all my opinions from Fox, fair and balanced:

        “The New York Times has finally discovered what everyone else (including Obama economic adviser Larry Summers) has long recognized: extending the duration of unemployment benefits increases the duration of unemployment…”

        http://www.foxbusiness.com/on-air/stossel/blog/2010/08/17/unemployment-insurance-doesnt-work

        • HonestDebate1

          It’s axiomatic.

        • hennorama

          John Cedar – TY for your response.

          One doubts that where you “get all [your] opinions from” matters to many.

          However, pointing to an opinion piece from over three years ago, which cites Denmark as its proof, demonstrates the validity and currency of your opinions quite well.

          Thanks for your “contribution.”

          • John Cedar

            hennoram – as always, your contribution to the discussion is much appreciated.

            While I am concerned for the many, I also must keep in mind, the concerns of the few.

            It has been my observation that the laws governing the universe do change little in three years years time. I wonder if there is any evidence which might hint that receiving money for not working is not a disincentive to find employment.

            I live in NY, where freestuff is the norm. I have much anecdotal evidence, from a lifetime of watching how acquaintances and close friends approach their own unemployment situations, which is in agreement with the opinion piece.

          • hennorama

            John Cedar – your response is welcomed.

            Thank you so much for adding your valuable anecdotal evidence, which is no doubt quite scientific and statistically valid. Piling that on top of an opinion piece that cites an older study from Denmark demonstrates your avid interest in the topic.

            One imagines how you would proceed with “the laws governing the universe” in regards to your development business. It would be interesting to observe the reactions of planning boards and building departments to plans submitted using Danish building codes and zoning regulations from 2010, and how you might defend them as based on “the laws governing the universe.”

            Please allow a quote from a recent (April 2013) FEDERAL RESERVE BANK OF SAN FRANCISCO
            WORKING PAPER, titled

            “Do Extended Unemployment Benefits Lengthen
            Unemployment Spells?
            Evidence from Recent Cycles in the U.S. Labor Market”

            The researchers compared two recent periods during and after economic downturns, (2000-2005 and 2007-2012) both of which prompted UI extensions. They “found small but statistically significant reductions in unemployment exits and small increases in unemployment durations arising from both sets of UI extensions. The magnitude of these overall effects is similar across the two episodes.”

            This is the final paragraph from the Concluding Remarks:

            “Overall, our estimates suggest that extending unemployment insurance benefits in weak labor markets has virtually no effect on the rate of job finding but that, on average, unemployment spells are somewhat longer as a subset of UI recipients remain nominally unemployed rather than exit the labor force. In addition to these limited implications for economic efficiency, we find only small impacts on the aggregate labor market. We estimate that extended UI increased the overall unemployment rate by only about 0.4 percentage points in the recent episode, which is small in comparison with the peak unemployment rate of 10 percent.”

            They found impacts, but “virtually no effect on the rate of job finding,” and “somewhat longer” duration, and “only small impacts on the aggregate labor market.”

            See:
            http://www.frbsf.org/economic-research/files/wp2013-09.pdf

          • John Cedar

            Thank You for helping me to understand reality from my misconceptions.

            Perhaps you could help me answer another question that I used to be sure of. Do you have any links to white papers authored by pointy headed librul pontificating professors, which use linear regressive analysis to show us that water is not wet?

      • HonestDebate1

        Yes, you are a liberal.

  • StilllHere

    The Federal Government is closed today, the third time this quarter. Chaos and destruction are imminent. Seek shelter and non-perishable foodstuffs.

    • JGC

      Seek shelter in the office of Senator Toomey. He has hoarded PopTarts and Heinz ketchup in the supply closet.

  • ThirdWayForward

    Keep reducing the work week until we get full employment.
    Spread the work around.

  • WorriedfortheCountry

    Uh oh!!!

    “The Rich DO Create Nearly Every Job”

    Someone please let Obama in on the secret before it is too late.

    http://www.realclearmarkets.com/articles/2013/12/10/sorry_henry_blodget_the_rich_do_create_nearly_every_job_100785.html

    • jimino

      Since they have unprecedented wealth at their disposal, where are the jobs?

      • WorriedfortheCountry

        Excellent question. The answer is found in three letters that rhymes with red. You can also throw in the regulatory anchors created by this administration — starting with Obamacare.

        http://www.americanthinker.com/2013/10/bubblicious_fed_hurts_job_growth.html

        • jimino

          Ridiculous. The Fed, for all its faults, does not prohibit real investors from making real investments.
          So I repeat: why aren’t they doing it.

  • marygrav

    I can’t understand why the 99% does not understand the T-Party Ryans. They want to reinvent slavery and make White people like it as part of what they deserve.

    It is time that Americans start to read mid 20th Century history and find out why and how the middle/working class is being wiped out. The first thing to read is 40 Good Years by Irving Kristol. The Second thing is to investigate the connection between PNAC and the AEI. If you are hunting an American War Criminal look in the membership of the AEI.

    Still better read Kim Phillips-Fein’s The Hidden Hands. This book gives you the basis for the Robert Reich film. Nothing has happen in American economics and employment that cannot be detached from Kristol’s 40 Good Years.

    Republicans/T-Party, unlike the Communist Chinese government, are not afraid of the PEOPLE. This is why they can make the threats of a Modest Proposal of starving the American people and putting them out in the snow. They understand that most of US are cowards and will not challenge the status-quo, yet they are will to go to foreign lands promising freedom and the good life. The Ukraine had be careful what it wishes for.

    John Boehner should be sent home for the duration. His tan may fade for how long it will take to pass the budget. If the T-Party wants to shut the government down, GOOD! Election 2014 and 2016 is right around the corner. Shut that Motha’ Down so that Americans can put their zippers in the front of their pants.

    What the unemployed need to tell the GOP that if they are determined to cut their benefits, that the thing they will purchase with their last check is a weapon, enough ammunition, and a google address book. This of course is only a Modest Proposal because Revolution is something Lenin, Che, and Castro did and we are too good for that.

    My main question is what is the matter with White people? As a Black person I know when I complain it will be reported that all I want is Welfare. Even when I go to my City Council here in IC expressing “quality of life” issues, it seems that what the people this is that I am whining about race issues.

    The only race I am interested in is the human race. And if we want to preserve America as America, we will all have to get together and Operate on T-Party which is only a front organization for the 1%. Workers of the World had better unite, but not in neo-slavery.

    Don’t go for that BS that the US will look like Greece. Greece wouldn’t be in the trouble that it is in if it were not for Neocons laizze-faire cooking of the books that force the EU to admit it.

    Read and study.

    • pete18

      “This is why they can make the threats of a Modest Proposal of starving the American people and putting them out in the snow.”

      Could you give us some details about this particular proposal, I haven’t heard about it?

  • James Burns

    As a Tennessee resident who survived a year on unemployment, I would like to express my opinion that both the caller from Tennessee and the economist guest were woefully ignorant of the realities and basic math of living on unemployment benefits-especially in TN. Any job that pays less than $9.00 an hour for a full 40 hour week COSTS a person drawing full unemployment benefits to take.

    Unemployment benefits in TN max out at $275/week. (Slightly more than 1100/month averaged out over a 26 week year) A person drawing this pays federal income tax. But they can park their car, cancel their car insurance and also not pay Social Security or Medicare. As I discovered, one thing unemployed people do have is time. We can walk everywhere.

    A minimum wage job, full time, is $290 per week. $9.00 an hour is $360 per week. Once a person works, they have to pay Social Security and Medicare taxes. That takes off of bring home pay. Unless one lives in the 10 or so biggest cities in TN, one had better live within 5 miles of work or one will need a car. (No public transportation in most of TN) ((!Guess what.. if you don’t have a car in a place without public transportation, most employers won’t hire you because they don’t believe you will get to work on time!)).

    When you add in the cost of car insurance and gasoline to Medicare and Social Security taxes, less than full employment at $9.00 an hour means you have to live on less! That’s just to break even! If people are not getting any benefit from it, why would they go to work? It is not that people do not wish to work. They just do the math and don’t see any benefit to doing so.

    BTW, the math gets far worse if a person is a single parent.

    • warryer

      The question is why did you get yourself into that predicament in the first place? Why haven’t you made better economic decisions for yourself?

      It all comes down to personal choice.

      • Steve__T

        You must be under 20, That’s the dumbest question to ask or statement to make to a person I hope your personal choices don’t bite you in the a@@ You will find that life can change quickly and not always for the best. Regardless of your choices, plans, wealth or community standing.
        If you are older what planet do you live on?

        • jefe68

          Social Darwinism, it’s the way the libertarian mind works.

          • warryer

            Personal responsibility.

          • James Burns

            To answer the question, my employer shut down my office due to changing technology. I did the math and calculated that it was to my personal economic advantage to draw unemployment while looking for new work instead of taking a low level job. I did so and have been gainfully employed for over three years at a decently paying job. In no way do I feel things were unfair to me. However, I did not choose to become unemployed nor did I invent the technology that replaced me.

            In the current economy, even professionals with advanced degrees and years of experience are out of work.
            I was responding to the caller in the program who was complaining at all the businesses with now hiring signs for months and his understaffed office. The caller was complaining that people would rather draw unemployment than work. I was showing the math that leads people to make that decision. Most basic office jobs (receptionist, HR clerk, dispatcher, etc.) do not pay very well. So, yes, because people are not stupid, they are not going to take a job that would COST them money to take.

        • warryer

          Why does your response depend on my age? Reasoning work regardless of age.

          To say you are totally at the mercy of your surroundings means you don’t really have any choice in the matter which is plain wrong. You always have a choice, no matter how limited they may be.

  • Michael Bristol

    The political theater of the deal as above won’t stop the growth
    of the income divide between the top and all the rest.
    And nothing here discussed changes the fact that no vote, whether Democrat or Republican, can work against the interests
    of Goldman Sachs and its clients.

  • Michael Difani

    Jake Sherman of Politico related a succinct and well written explanation of this issue last night with Tom Ashbrook.

ONPOINT
TODAY
Jul 30, 2014
Smoke and fire from the explosion of an Israeli strike rises over Gaza City, Tuesday, July 29, 2014. Israel escalated its military campaign against Hamas on Tuesday, striking symbols of the group's control in Gaza and firing tank shells that shut down the strip's only power plant in the heaviest bombardment in the fighting so far. (AP)

Social media is changing how the world sees and talks about Israel and Gaza, Israelis and Palestinians. We’ll look at the impact.

Jul 30, 2014
Janitta Swain, Writer/Exec. Producer/Co-Director Dinesh D'Souza, John Koopman, Caroline Granger and Don Taylor seen at the World Premiere of 'America: Imagine The World Without Her' at Regal Cinemas LA Live on Monday, June 30, 2014, in Los Angeles, CA. (AP)

Conservative firebrand Dinesh D’Souza says he wants an America without apologies. He’s also facing jail time. We’ll hear him out.

RECENT
SHOWS
Jul 29, 2014
This April 28, 2010 file photo, shows the Colstrip Steam Electric Station, a coal-fired power plant in Colstrip, Mont. Colstrip figures to be a target in recently released draft rules from the Environmental Protection Agency that call for reducing Montana emissions 21 percent from recent levels by 2030. (AP)

A new sci-fi history looks back on climate change from the year 2393.

 
Jul 29, 2014
The U.S. Senate is seen on Capitol Hill in Washington, Wednesday, July 16, 2014. (AP)

The “Do-Nothing” Congress just days before August recess. We’ll look at the causes and costs to the country of D.C. paralysis.

On Point Blog
On Point Blog
This 15-Year-Old Caller Is Really Disappointed With Congress
Tuesday, Jul 29, 2014

In which a 15-year-old caller from Nashville expertly and elegantly analyzes our bickering, mostly ineffective 113th Congress.

More »
1 Comment
 
Our Week In The Web: July 25, 2014
Friday, Jul 25, 2014

Why the key to web victory is often taking a break and looking around, and more pie for your viewing (not eating) pleasure.

More »
Comment
 
The Art Of The American Pie: Recipes
Friday, Jul 25, 2014

In the odd chance that our pie hour this week made you hungry — how could it not, right? — we asked our piemaking guests for some of their favorite pie recipes. Enjoy!

More »
Comment