It's The Summer of Recovery. Just ask perky Vice President Joe Biden, who says there's no doubt about it. Here's the evidence:
• "We've [that is, the Obama White House] created or saved 3.8 million jobs." Since almost none has been created outside of the short-term hiring at the Census Bureau, he must mean that the rest were "saved." That use of the word, coined by this administration, is useful since it can neither be proved nor disproved. Thus, anyone who didn't lose his or her job in the recession had it "saved" -- presumably by the Obama "stimulus" money.
• The other day, President Obama called a Rose Garden press conference to introduce three Americans who have been jobless so long their unemployment benefits were about to run out. Congressional Democrats obliged by extending these benefits to 99 weeks for some 2.5 million people. That's just short of two years. What happens when it runs out, another extension? The jobless folks he trotted out may represent the cutting edge of a new welfare program.
There is hardly an economist alive who would argue with the adage that the more you subsidize something, the more of it you get; and the more you tax something, the less of it you get. It looks as though the White House has decided that since its $862 billion "stimulus" program didn't produce any jobs, it might as well pay people not to work. Although no one wishes ill to job seekers, with their ever-extended benefits more than a few will decide that rather than taking a job that pays less than their old one, they'll hold out until something better comes along. That's human nature.
Meanwhile businesses are not hiring, partly because of the current tax-and-regulatory climate and partly because they worry about what comes next. Unless Obama and Congress get over the temptation to fight a perpetual (and imaginary) class war, the Bush tax cuts will expire December 31. For many businesses, especially those in the Subchapter S category (profits taxed at individual rather than corporate rates), taxes are going to go up.
Capital gains tax rates will also go up. Repeatedly in the course of modern decades, hikes in the capital gains rates have consistently caused U.S. Treasury revenues to drop. Rate reductions have caused them go up. The explanation is not complicated, no matter how hard the left tries to avoid learning it. Higher rates cause thousands of decisions makers to decide against investing in new businesses or to add employees or purchase new equipment for existing ones. Lower rates produce the opposite result: new businesses start up, people are hired, equipment is purchased. Seems simple, but it causes palpitations among those who are haunted by the lurking worry that somehow, somewhere, someone is going to make a profit.