Unemployment Figures released today by the Bureau of Labor show job losses are falling. But economists agree that unemployment is not going away any time soon. Democrats want government to tackle the problem with job creation programs to repair the country's transportation system, bridges and infrastructure. But Republicans say the businesses and corporations will kickstart a recovery – if only legislators would reduce taxes and regulations. Oregon Rep. Peter De Fazio is co-sponsoring a bill in the US House -- "Let Wall Street Pay for the Restoration of Main Street" -- that would tax Wall Street transactions. The bill aims to raise $150 billion from taxing stock and securities sales and transfers at a rate of one quarter of 1 percent. Half the money raised would go to job creation and the other half to reducing the federal deficit.
"We cannot wait for the next bubble to pull us out of the recession," De Fazio said in a statement. "We must invest in our future, our infrastructure, and our middle class now. This legislation will ensure Wall Street pay for needed investment to get our country back on track."
Targeted at financial speculators, the legislation will not affect the average investor or on pension funds, De Fazio said. It specifically excludes transactions involving health, education, retirement savings, mutual funds accounts, and the first $100,000 transactions not already exempted. The job creation funds would go to national transportation and infrastructure projects. De Fazio is one of 22 Democrats co-sponsoring the bill, HR 4191.
New York Times columnist and Nobel prize winning economist, Paul Krugman this week called for an emergency jobs program – similar to the New Deal that put thousands of unemployed people to work on national projects in the 1930s – along with other major measures to solve the unemployment crisis that has pushed the national unemployment rate above 10 percent.
"Historically, financial crises have typically been followed not just by severe recessions but by anemic recoveries; it's usually years before unemployment declines to anything like normal levels," Krugman says in his column. "The Federal Reserve, for example, expects unemployment, currently 10.2 percent, to stay above 8 percent — a number that would have been considered disastrous not long ago — until sometime in 2012."
Unemployment figures announced Dec. 4. showing that job losses are declining, don't change Krugman's opinion. "Today's unemployment report was good news," he writes in his blog. "But in a real sense good news is bad news, because this month's not-too-bad number deflates the sense of urgency. The fact remains that realistic projections show unemployment staying disastrously high for many years."
Appearing on MSNBC's Rachel Maddow show Dec. 3, De Fazio agreed with Krugman's conclusions. "We have a plan to begin to catch up with our infrastructure deficit in this country," he told Maddow. We could productively invest within 120 days $79 billion creating over $2 million construction jobs, associated jobs in engineering and other fields and about 400,000 manufacturing jobs… That's just a start, but it would put a foundation under a long-term productive recovery for this country."
Republicans however, oppose De Fazio's plan. Former Massachussetts Gov. Mitt Romney, in a column for USA Today, offered his own 10-point plan for recovery. His ideas include: cutting payroll and other taxes on businesses, sending all the remaining stimulus money to the private sector, extending the Bush tax cuts, cutting government spending on everything except military needs, and reforming entitlement programs to limit spending on social security, Medicare and disability safety net programs. In addition he writes, government should:
"Install dynamic regulations for the financial sector — rules that are up to date, efficient and not excessively burdensome. But do not so tie up the financial sector with red tape that we lose a vital component of our economic system."
At a press conference Dec. 4, House Minority Leader John Boehner R-Ohio said the stimulus legislation has failed and any new taxes will be counterproductive.
"When you look at the tax increases they're talking about on all fronts, this is money that could be invested in our businesses, but won't be because they'll have to pay it to Washington," he said in a news conference Friday. "More than three million Americans have lost their jobs since the President signed the trillion-dollar 'stimulus' that was supposed to keep unemployment below 8 percent and put people back to work 'immediately.' …the costly policies Washington Democrats are pursuing – whether it's a government takeover of health care, a national energy tax, or 'card check' – are already costing jobs and will pile even more debt on our kids and grandkids."