Writing at the Huffington Post, former Labor Secretary Robert Reich says President Obama hasn’t proposed a significant enough jobs plan and offers the following as what Obama should propose:
First, we’ll exempt the first $20,000 of income from payroll taxes for the next two years. This will put cash directly into American’s pockets and boost consumer spending. We’ll make up the revenue shortfall by applying Social Security taxes to incomes over $500,000.
Second, we’ll recreate the WPA and Civilian Conservation Corps — two of the most successful job innovations of the New Deal — and put people back to work directly. The long-term unemployed will help rebuild our roads and bridges, ports and levees, and provide needed services in our schools and hospitals. Young people who can’t find jobs will reclaim and improve our national parklands, restore urban parks and public spaces, recycle products and materials, and insulate public buildings and homes.
Third, we’ll enlarge the Earned Income Tax Credit so lower-income Americans have more purchasing power.
Fourth, we’ll lend money to cash-strapped state and local governments so they can rehire teachers, fire fighters, police officers, and others who provide needed public services. This isn’t a bailout. When the economy improves, scheduled federal outlays to these states and locales will drop by an amount necessary to recover the loans.
Fifth, we’ll amend the bankruptcy laws so struggling homeowners can declare bankruptcy on their primary residence. This will give them more bargaining leverage with their lenders to reorganize their mortgage loans. Why should the owners of commercial property and second homes be allowed to include these assets in bankruptcy but not regular home owners?
Sixth, we’ll extend unemployment benefits to millions of Americans who have lost part-time jobs. They’ll get partial benefits proportional to the time they put in on the job.
Presumably, this is the kind of super-stimulus that Reich, Paul Krugman and other arch-progressives have said Obama and Congress should have passed in 2009 — although, admittedly, I can’t tell whether Krugman is for or against such things these days. In short, the idea is that we will boost the economy by taking more money from high earners and giving it to lower wage earners; performing more of the kind of infrastructure work and preserving more of the kind of public-sector jobs that the actual stimulus did, to disappointing effect (forget that whole “there’s no such thing as shovel-ready projects”); and threatening the financial health of the very banks that, as Reich notes, we bailed out less than three years ago.
Gee, I wonder why Obama hasn’t proposed a plan like this?
– By Kyle Wingfield