Friday, December 03, 2010

If unemployment is getting worse, we should raise taxes, right?

Reports the Associated Press:

WASHINGTON – In a surprising setback, the nation's unemployment rate climbed to 9.8 percent in November, a seven-month high, as hiring slowed across the economy.

The report was a reminder that the economic recovery is proceeding more slowly and fitfully than many economists had expected. It is likely to push lawmakers before year's end to pass an extension of long-term unemployment benefits, which expired this week.
No mention of taxes! Apparently it escapes the wizards at the Associated Press that if you raise taxes on the hiring class, you'll get less hiring. (You'll also get less work, but that's a much more subtle result.) Could it be? -- could it possibly be? -- that hiring slowed precisely because small businessmen feared their taxes would go up on January 1?

Congress meanwhile thinks this is a great moment to raise taxes, at least on the more favored members of society, who are also the ones running the businesses that aren't hiring anybody this month, thanks all the same! Of course the vote is mostly a symbolic nod to the "progressive" left of the Democratic party, since such a bill has almost no hope of passage in the Senate. But it does show how desperately some people would like to reprise the 1930s, when the Roosevelt administration took a financial panic and turned it into an eight-year Depression. Blue skies! -- Dan Ford

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