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Friday, December 10, 2010

Rep. Ellison (D-MN): We Must Create "Real Crisis" to Force Change in Obama's Tax Compromise

On an interview with Minnesota Public Radio, Democratic Representative Keith Ellison from Minnesota called for fellow Democrats to cause a “real crisis”, in order to force Republicans to drop the tax rate extension for those in the $250.000 and above tax bracket:

Minnesota 5th District Congressman Keith Ellison said Thursday that Democratic lawmakers "need to create a real crisis" to force Republicans to renegotiate the tax cut compromise.

House Democrats voted Thursday to reject the tax cut deal between the White House and Congressional Republicans.

The compromise would extend Bush-era tax cuts for all Americans, including the wealthy. It also would renew benefits for the long-term unemployed, a measure President Obama had pushed for to prevent about 2 million Americans from losing benefits in the coming weeks. Republicans had opposed extending unemployment benefits.

Ellison, who was recently elected co-chair of the Progressive caucus in the House, voted against the compromise.

"I think that we need to create a real crisis here so that the Republicans will have to answer for denying Americans unemployment benefits on the eve of the Christmas holiday," Ellison said. "We let them off the hook, in my opinion."

Ellison is hoping to play a game of chicken with everyone’s taxes and the health of our economy. He is betting on that the Republicans would rather raise taxes on those who create jobs for this economy and cost us job growth than to let them expire for everyone and have everyone’s taxes go up in a few weeks.

However, a few Republicans, like Jim DeMint, have indicated that they are not totally opposed to letting the cuts expire in January. They would do this looking to get an even better deal, when they have a greater majority.

If they go that route, they have, also, indicated that any new tax bill would be retroactive to the beginning of the year to ensure that no one will pay higher taxes in the end. This would still cause more money to be taken out of people’s checks at the beginning of the year, until it gets passed. However, people would get their money back in the form of a refund, when they file their 2011 this is the best way to go, though, because a dip in people’s take home pay, no matter how if it is only for a few weeks, will have a negative effect on our economy and cause a lull that would be felt for longer than just a few weeks.

But Democrats have much more to lose than the Republicans do by balking at passing the Obama Tax Compromise. They will be negotiating at a much bigger disadvantage next year than the Republicans would, if the deal fell through in Congress. Plus, the White House and the Republicans are positioning the Democrats as the obstructionists, if it fails. They would become the new “Party of No”. The Democrats will talk big over the next week maybe two, but in the end, I believe that they will reluctantly pass it. They are just making sure that the American people know where they stand on the issue. They are grandstanding in the highest order.

I find it amusing that progressive, liberal Democrats have suddenly started to care about huge creating deficits, if there are only a few jobs that are created by this bill. This is what Ellison said about that point, “You need to understand me. I' m not saying that there won't be any jobs created from this bill, but how much per dollar will the jobs cost?” Where was this concern, when the Democrats were passing a about a trillion dollar bill that would in the end create zero jobs net:

A study by Daniel J. Wilson of the San Francisco Federal Reserve Bank suggests that the net job creation from the $814 billion stimulus bill passed in February 2009 was zero by August 2010. In the first year, the stimulus "saved or created" 2 million jobs (not 4 million as repeatedly claimed by the administration), but this number proved to be short-lived, paying for temporary jobs, at a very high cost of $400,000 per job "saved or created."

By August, 2010, the impact of the stimulus on net job creation had disappeared. This is an astounding result, which destroys the Paul Krugman argument that the economy would be so much better right now if only Congress had approved much more spending in February 2009. Double the initial spending, double the number of temporary jobs, with likely the same net result by this point in time, or a trivial number of "permanent jobs created . In fact, the unemployment rate is at a substantially higher percentage rate today at 9.8% than when the stimulus bill was passed.

That $400,000 per job figure based on the assumumption that 2 million jobs would have been created. It was no where near that, and what jobs were created are now gone. He is being a bit of a hypocrite if he didn’t care then but cares now.

Using class warefare rhetoric, he goes onto complain that letting people keep their own money is somehow not fair. They want to keep taxes low for everyone not just the rich. So, how is that not fair? Liberals believe that your money is really the government’s money, and they are only being gracious in letting you keep as much money as they do. Only in the minds of liberals, do they believe that letting people keep the money that they make is unfair.

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