Last week we asked if the White House jobs summit would be able to yield a cost-effective solution to stem job loss. Judging by the president’s proposals to increase employment outlined in a speech Tuesday, the answer seems to be “not really”:

The president’s proposals addressed three main areas. He focused primarily on help for small businesses, targeting them with tax credits to encourage hiring and unused Wall Street bailout dollars to increase lending. He also backed a one-year elimination of the capital gains tax on gains from new investment in small business stock and other measures.

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Unfortunately, this is rather old news. In early May we had warned readers that those few extra bucks you were receiving in your paycheck each week, thanks to the president’s Making Work Pay tax credit, may need to be paid back come tax time.

“Uncle Sam will want your tax cut back,” 5/2/09: Read the rest of this entry »

The New York times called lawmakers’ ability to reduce the size of the stimulus package a defiance of “Washington’s peculiar laws of physics.”

Don’t be too proud.

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This pretty much tells the sorry tale:

The nearby chart shows how the bill will increase the 2009 budget deficit, which is already the largest in modern history. … analysts at the Strategas Group estimate the deficit could hit nearly $2 trillion, or 13.5% of the U.S. economy.

We aren’t deficit scolds, but these levels are uncharted territory, especially if any economic recovery is weak because the spending doesn’t stimulate. The new spending means new federal debt in the trillions of dollars over the next few years, which will test the limits of America’s credit-worthiness.

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Negotiators from the House and the Senate approved a less-expensive version of the stimulus bill this afternoon, prepping the House for a vote as soon as Thursday, and the Senate as soon as Friday.

As it stands now, over one-third of the $789 billion bill is dedicated to tax cuts. Although lawmakers were able to shrink the overall price tag, it may have come at a cost to American workers anticipating a larger tax cut:

Multiple Democratic sources earlier said 35% of the bill deals with tax cuts, 65% with spending. They gave some other details of what was being worked out: Read the rest of this entry »

Another 598,000 Americans lost their jobs in January, raising the total to 3.6 million since the recession began in December 2007. With the unemployment rate currently at 7.6%, analysts continue to forecast that the unemployment rate will exceed 9% by 2010.

Opinions aside on whether or not the “American Recovery and Reinvestment Act” will promptly provide jobs or economic rejuvenation, there are significant measures written in to support the 7.6% of Americans who are currently unemployed: Read the rest of this entry »

While most economists forecast a 5.4% decline in the nation’s gross domestic product (GDP), a measurement of the country’s total output of goods and services, the growth indicator contracted less than market observers feared.

The 3.8% decline, despite beating predictions, is still the worst drop in 27 years — the most since the first quarter of 1982.

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Federal Reserve Chairman Ben Bernanke delivered a speech today at the London School of Economics on “The Crisis and the Policy Response.” Mr. Bernanke argued that the president elect’s stimulus package alone would not be enough to facilitate an economic recovery.

“In my view, however, fiscal actions are unlikely to promote a lasting recovery unless they are accompanied by strong measures to further stabilize and strengthen the financial system.  History demonstrates conclusively that a modern economy cannot grow if its financial system is not operating effectively,” said Bernanke.

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