No extended unemployment benefits were in the debt ceiling deal. No payroll tax holiday was in the deal either. There was absolutely nothing to stimulate job growth. Just more proposed cuts to government spending, but not a penny more in tax revenues. The Tea Party bullies mugged President Obama, punched him in the nose, and stole his lunch money. And now the rest of the country has to suffer for that.
According to the New York Times, nominal personal income increased by just 0.1 percent in June — and the increase was due to "higher government transfer payments" (such as unemployment benefits) and capital gains income (such as earnings made from stock sales by investment bankers and hedge fund managers), not wages and salaries for average working folks. In fact, private wage and salary income fell in June.
None of these facts bode well for growth in the third quarter of this year, given that the economy is so dependent on consumer spending. And the austerity measures created by the recent debt ceiling deal look unlikely to make things better.
The Republicans have recently been making the argument that any cuts to defense spending could threaten jobs (as if corporate profits weren't their main worry). A counter-argument could be made that any cuts to employment benefits and Social Security entitlements could also threaten jobs; and just like defense spending, is also funded by taxes. But the Republicans don't want to raise taxes on the big corporations or the wealthiest 3 percent.
It's almost as though the GOP wants to strangle the economy, and just to make Obama look worse than he already does.
And just as wages in the defense industry are funded by taxes and induces consumer spending (but unlike capital gains income), unemployment benefits and Social Security payments also go directly and immediately into the economy. And the tax rate on government-funded wages and unemployment benefits are taxed at a higher rate than the capital gains income that CEOs and bankers earn.
But the Republicans won't extend unemployment benefits any longer, and they also want to cut Social Security too; but they don't want to raise the tax rate for capital gains, eliminate tax loop holes, or end corporate subsidies for corporations...but yet they still want to continue funding defense spending. Get it?
It's not the jobs in the defense industry the GOP is so concerned about, but the profits that corporations earn from taxpayer-funded defense spending (taxpayers, meaning us, not them). And the CEOs who run those corporations pay capital gains taxes. From the top to the bottom, the GOP's strategy has always been about the wealthiest 3 percent, not you...and they could give a damn about jobs...OR the debt ceiling.
Whenever the Republicans utter that dirty word "taxes", they NEVER mention "on the wealthiest 3 percent" (millionaires and billionaires). And whenever they utter the words "debt" or "spending", they are ALWAYS referring to Social Security and Medicare (and other programs that WE need like unemployment benefits). They would prefer that the ONLY government spending we do is on defense - - - and maybe NASA and border control. That's all. Oh, and a strong intelligence community with lot's of law enforcement personnel to protect THEIR assets, but not to protect OUR asses.
According the IRS, there were 140,494,127 tax returns filed in 2009 (there were over 154 million returns before the Great Recession). In 2009 there were 236,883 people who earned over $1 million that year, and 8,274 who earned $10 million or more (see Virgil Bierschwale's post for more info). THOSE are the people that the Republicans represent. That's why I always ask, "Why would anyone vote Republican if you earned less than $1 million a year?"
By the end of this year we'll still have 14 million+ unemployed people, and not a single one will be receiving unemployment benefits - - - unless they lost their job after today. How much consumer spending will there be by then? If it's bad now, it can only get worse. (I said the same thing at this time last year too, and now do you see?)