Compromise is good, but how about the right compromise? Let's avoid getting too long winded with theory and focus on some facts. Little has been done to abate the unemployment issue concerning the United States that rose to an obscene 10.4% in September. The Department of Labor shows that it now stands at a still staggering 9.8% and is inherently going to be the largest issue for the 112 Congress in January.
The Center for American Progress put out a great analysis of the current tax cut deal between Obama and McConnell. Below show two options. The option on the left would put more money in the economy, and is the proposed option extending tax cuts to ALL Americans and costing $594m with a net gain of 2.17m jobs. Not bad as long as the rich don't stash their money in banks.
The alternative option on the right eliminates the tax cuts for the top 2% and costs the government an extra $13million but creates 500k more jobs, which comes out to about 26 bucks a job. Quite a small price to pay for something that will inevitably help the economy out and the struggling middle class. Tax cuts would still be awarded to those families between the $250k-1million annual income level.
I do have more trust that studies have shown in the past that the rich will spend the money they get back in tax cuts over the next two years and money will circulate rather than accumulate in offshore accounts, but is it a risk that we can take?
As long as people are not dying more than usual this year I don't see the change in the Estate Tax either crippling nor correcting the budget deficit.It all comes down to if we want instant gratification(surplus of money dispersed over all income levels) or if we want to create more jobs and watch the spending within the economy go up over the nest 5-10years once the newly employed get on the right track.
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