The inexplicable focus on birth control

When President Obama ruled that religious institutions were required (under the new health care law) to cover contraception in their insurance coverage, it set off an overwhelming amount of outrage on the right.

What I find hard to explain, though, is the sudden and intense vitriol over one particular thing--birth control. Obama's ruling, after all, is just one more consequence of Obamacare, a law that 72% of Americans think is unconstitutional. The Republicans could have responded to the birth control mandate by escalating their attacks on Obamacare generally, as an infringement of liberty--and probably would have received a lot of support. Instead, for the next few weeks Rick Santorum (and to a lesser degree, Newt Gingrich) made birth control the major talking point of his campaign and the GOP debates. There was little or no mention of Obamacare or its infringement on individual liberty for everyone, just a lot of talk about religious liberty for the small minority of Catholics who take the birth control prohibition seriously. On his radio show, Rush Limbaugh called student Sandra Fluke a "slut" for advocating for birth control--and GOP frontrunners Santorum and Mitt Romney were unwilling to strongly criticize him. (On the flip side, nobody on the left seems to care about Bill Maher's history of equally appalling sexist rhetoric toward Michelle Bachmann and Sarah Palin).

This narrow focus on birth control is at best idiotic, and at worst chauvinistic. Surely Santorum, Gingrich, and Romney know that birth control is a hot-button issue for many women, and that the vast majority of Catholic women in America have used it. So why, then, do Santorum and Gingrich offer relatively tepid criticism of Obamacare prior to February, then bust into full-blown outrage over birth control? Why does Romney--who seems to have less fight than a sack of pillows--do nothing to counter them from the center? If the issue is "non-procreative sex," then why do they not seem to care that most insurance plans are already required to cover Viagra--which is probably most often prescribed for older men who have no intention or ability to procreate with their partner? Either they don't realize that they're alienating large swaths of moderate women and independents of both genders, or they actually do believe that women need to be kept under control.

GOP candidates taking full advantage of tax havens, taxpayer-funded pensions

Despite representing what is supposedly the party of fiscal conservatives, two of the five Republican presidential candidates are receiving tens of thousands of dollars in taxpayer-funded pensions, and front-runner Mitt Romney has deposited millions of his personal dollars in the Cayman Islands to avoid taxes.

Newt Gingrich is one of over 350 former US lawmakers and congressional staff receiving a federal pension of over $100,000 a year. Rick Perry gets a Texas state pension of over $92,000 a year in addition to his governor's salary. This seems questionable for two candidates who repeatedly denounce excessive government spending.

Meanwhile, Romney has between $10 million and $25 million in accounts in the Cayman Islands, a notorious tax haven. Because of his Cayman accounts--and the fact that much of his Bain income was classified as capital gains rather than ordinary income--Romney has been paying a far lower percentage in taxes (about 15 percent of his earnings) than most Americans.

So it seems extremely unlikely that the next president, no matter who it is, will do anything to reform the tax code. Obama and the Democrats will use Romney's low tax payments as yet another argument for raising tax rates, despite the number of millionaires and billionaires (Obama, Pelosi, Kerry, etc) in the party leadership. That's because they know that they can continue to exploit loopholes in the tax code, and only those who are less politically connected will be hit by the tax hike. Assuming he gets the Republican nomination, I cannot imagine Romney--a Wall Street millionaire with numerous accounts in the Cayman Islands--to do anything about tax loopholes. The Republicans seem to think that they can have their cake and eat it too by cutting tax rates while keeping loopholes and congressional pensions in place. Is it a coincidence that the last three Republican administrations have run massive deficits nearly every year?

GOP, conservatives need to get priorities straight

Going into the election year of 2012, major polls (see here and here) highlight two issues as most important to voters. One is the economy (which includes unemployment/jobs) and the other is the budget deficit. The wave of Republicans who came into Congress in 2010 attempted to address these issues by insisting on spending cuts to reduce the deficit, resisting tax increases for fear of further damaging the economy. A number of bitter deadlocks ensued as President Obama insisted on tax increases and repeatedly balked at cutting spending.

Now, Obama has finally come up with $500 billion in spending cuts--but rather than celebrate, the editors of conservative magazine National Review attack him viciously. The reason? Obama wants to cut the Pentagon budget. In attacking the cuts, National Review calls Obama's plan a "retreat" and pulls out all the usual neocon arguments. They scold Obama for trying to return troop levels to where they were at the end of the Clinton administration--which was not coincidentally the last time we had a balanced budget.

Here is one quote: "At its Cold War peak, U.S. military strategy called for the peacetime ability to simultaneously fight and win two major theater wars and a “brushfire” conflict. The years after the Soviet collapse saw that capability pared down in the name of the “peace dividend,” just in time for the 9/11 decade to deliver . . . two major theater wars and a series of “brushfire” conflicts... But the president draws precisely the wrong conclusion from the challenges of those conflicts. Faced with our struggle to fight up to our own standards, he has elected to lower the bar."

Well, if "lowering the bar" means that less Americans die fighting for dubious causes in wars like Vietnam or Iraq, and our deficit is reduced as well, then I'm all for it. It seems to me that Obama drew exactly the right conclusion: don't start a war without an imminent threat to America and don't engage in prolonged nation-building.

Conservatives really need to realize that we can't do it all. We can't balance the budget, keep taxes low, maintain our infrastructure, keep an acceptable safety net, and continue even a stabilized version of Social Security and Medicare while continuing to act as the world's lone policeman. Not only that, but unless Republicans are willing to cut their favored programs, it would be disingenuous to ask Democrats to do the same.

Republicans nearly shoot themselves in the foot on payroll tax

Congress has agreed on a two-month extension of the payroll tax holiday, which prevents payroll taxes from going back up from 4.2% to 6.2% on January 1. However, this only happened because House Republicans finally gave up their bitter fight against the extension. The reasoning for their resistance made sense only from a pure economic-growth perspective. Historical data shows that stimulus payments and temporary tax cuts do little in terms of sustainable job creation or GDP growth. Long-term tax cuts, like those under JFK in 1961 or Reagan in 1981, have done much better at reviving the economy. A two-month extension could also create problems for businesses trying to budget their costs.

From a political perspective, however, repeatedly voting down the payroll tax extension was a colossal mistake. Ever since they gained back control of the House in January, Republicans have been stubbornly--and often understandably--resisting any and all tax increases. Most of the tax increases they fought against were, predictably, income tax hikes on the wealthy. Some Republicans, devotees of Grover Norquist, even fought against ending asinine tax breaks for special interests like ethanol because they considered that to be "raising taxes." 

Given that history, by trying to block the payroll tax extension the Republicans were simply asking to be portrayed as heartless, plutocratic buffoons. After fighting tooth and nail to extend the Bush tax cuts for the wealthy (warning of the dangers of raising taxes in a bad economy), the GOP was suddenly eager to let middle-class tax cuts expire. It seems like someone should have realized that putting themselves in a position to be blamed for millions of shrunken paychecks in a stalled economy was a really, really bad idea. Besides, I've mentioned in several previous posts about how destructive the payroll tax is--it's regressive for workers, and it directly discourages hiring. Better to just get rid of it completely and replace it with a national sales tax or something.

9-9-9 solves some problems, but may create bigger ones

Herman Cain's "9-9-9" tax plan is an interesting and radical proposal. It would scrap the current federal tax code completely and replace it with a 9% income tax, a 9% national sales tax, and a 9% corporate tax. Since Cain continues to lead in the GOP polls, his plan clearly has some support at least among Republicans.

And it does make some major improvements on the current tax code.  The payroll tax discourages hiring, hurts small businesses and low-income workers, and is almost hidden from view. The current marginal rates are very high, including a confiscatory 35% on businesses, which discourage production.Worst of all, the tax code is loaded with deductions and loopholes, which (combined with high marginal rates) encourage the special-interest lobbying and economic sleight-of-hand that are poisoning the current system. Under the current tax system it is very easy for the government to pick winners and losers. By zapping most of the deductions and loopholes and eliminating the payroll tax, Cain's plan does well.

The problem, though, is that the 9-9-9 plan is simply not fair.

There are three kinds of taxes. In a progressive tax, the rich pay a higher percentage than the poor. In a flat tax, everyone pays the same percentage. In a regressive tax, the poor pay a higher percentage than the rich.

Clearly, a regressive tax system would not be fair. We would also not want a tax system that is overly progressive. A very good argument can be made for a flat tax, as long as there exists a reasonable individual deduction to prevent the tax from hitting the very poor. There is also a very good argument for a tax system that is somewhat (but not overly) progressive. In the words of Adam Smith:


"It is not very unreasonable that the rich should contribute to the public expen[s]e, not only in proportion to their revenue, but something more than in that proportion."


Where does the 9-9-9 plan fall? Well, there are two taxes for individuals, the 9% income tax and the 9% sales tax. The income tax, of course, is flat. The problem is the sales tax. Sales taxes are almost always regressive, because the poor need to spend a higher percentage of the money they make. So the 9-9-9 plan replaces the current progressive tax system with a combination of a flat tax and a regressive tax, which is overall regressive.

That's not to say a national sales tax is a bad idea. While sales taxes are regressive, they do not distort incentives nearly as much as income taxes, because they discourage consumption instead of production. However, a national sales tax would need to be combined with a progressive income tax in order for the system to not be regressive overall. If Cain proposed a four-tier income tax (say, 5-10-15-20) with no loopholes or deductions, combined with a 9% national sales tax, a 9% corporate profits tax and a 9% capital gains tax, I'd vote for that in a second.

NLRB vs. jobs

In the words of the Chicago Tribune: "You have to wonder about a federal agency that sticks it to an American manufacturer creating thousands of good-paying jobs inside the nation's borders, instead of overseas.

Last week, President Obama gave a long speech about job creation. Boeing, however, has done more than give speeches: it is trying to create thousands of jobs--and not minimum wage jobs, either--by opening a new 787 assembly plant in South Carolina. Those jobs are in some danger, however, because of charges brought by the NLRB under the direction of the very same President Obama. The NLRB's complaint? Boeing is opening its new plant in South Carolina, a right-to-work state, rather than Washington where it has its headquarters. Never mind that no workers in Washington are going to be fired. The NLRB somehow thinks that it can tell companies where to build new plants.According to a poll by the Tarrance Group, 78% of Americans disagree and side with Boeing.

This leads one to wonder how much Obama actually does want to create jobs. If it was a priority of his, then it seems he would at least make sure that no part of the executive branch did anything to hinder job creation. Based on the actions of the NLRB, power, not jobs, seems to be Obama's chief concern. He seems to only be interested in creating jobs if the jobs are somehow under his control.

To stop the NLRB's overreach, Republicans in Congress have introduced legislation that prevents the NLRB from ordering employees to close plants or relocate employment. If that is vetoed or falls in the Senate, they may resort to stall tactics. According to the same Tribune article, Obama's recess appointment of board member Craig Becker runs out Dec. 31. and his departure would leave just two of the board's five seats occupied. So in the absence of any new appointments — which Republicans have vowed to block — the board will fall short of a quorum.

So what we have here is a federal agency trying to blatantly overstep its bounds and destroy thousands of jobs in the middle of a recession. Furthermore, Congress may not be able to stop it without effectively shutting the NLRB down completely, preventing it from performing its legitimate functions of investigating unfair labor practices. What a mess. 

GOP needs to stop resentment of low-income people who don't pay income tax

Traditionally, the Republican platform has been lower taxes for everyone, rich, middle-class, and poor alike. Both Reagan's and Bush's tax cuts benefited almost all workers. Recently, however, some Republicans, including several of the leading candidates, have been complaining about the poor not paying enough taxes. Specifically, they say it is a big problem that 47% of Americans do not pay income tax. In some ways, I see their point. If people are receiving social services but not paying for them, there is nothing to stop them from continuing to vote for more and more government services, ad infinitum. However, the working poor already pay quite a bit of tax: payroll taxes, sales taxes, and gas taxes. Saying they need to pay more tax--while also calling for less overall spending on social programs--is an extremely tone-deaf stance that could cost Republicans a lot of working class votes. It smacks of contempt for the poor and class warfare in reverse.

When I worked as an AmeriCorps volunteer three years ago, I made $900 a month before taxes. The $65 or so in payroll taxes that they took out of each month's pay was a huge hit. My AmeriCorps director encouraged me and my fellow volunteers to go on food stamps. I desperately wanted to avoid relying on government assistance, and managed to make it work--but that was possible only because I did not have to pay income taxes. If Republicans did raise taxes on the poor, many of them would probably just use more food stamps and welfare money. The end result would be more taxes and more government spending--which doesn't seem like what the Republicans want.

In fact, here is a Businessweek article by a conservative economist that calls for expanding the earned income tax credit in order to reduce dependence on welfare.

There is still, however, the issue of people receiving social services without paying for them. I can think of two ways to address this issue without raising taxes on the poor. One, limit the child tax credit, WIC, and similar programs so that credits/benefits gradually phase out after two children or so. At some point, parents have to be responsible for supporting their own children, and the government should not subsidize (i.e. encourage) people who have large numbers of children that they cannot support. Secondly, eliminate the payroll tax, replacing the worker's portion with an additional equivalent amount of income tax. I've already discussed the evils of the payroll tax (it's regressive, it often goes unnoticed, it discourages job growth by taxing hiring). Plus, that way, when Congress wants to cut or raise income taxes, every worker will feel the effects to some degree. Hopefully people will start to realize that they have to pay more to get more, and that tax cuts can help people at all income levels not just the rich.

Republicans, inexplicably, want payroll tax cut to expire

Last December, Congress passed a bill that reduced the workers' portion of the payroll tax from 6.2% to 4.2% for one year. There is naturally a partisan disagreement in Congress over whether to renew the tax cut or let it expire. Some are arguing that the tax increase would hurt workers and the economy overall, while others are saying that the revenue is needed to balance the budget.

Surprisingly, however, the Republicans are the party that wants the tax cut to expire--a tax increase by their definition. This makes absolutely no sense to me. The GOP is fresh off a tense budget battle in which they fought vigorously to avoid any tax increases whatsoever. And now they are changing their tune?

Apparently so. According to the Associated Press (see above link), Republican congressman David Camp opposes extending the tax cuts because of the deficit, and Eric Cantor "has never believed that this type of temporary tax relief is the best way to grow the economy."

Wait a minute. I thought the Republicans believed that tax cuts were the BEST way to grow the economy. If they oppose "temporary" tax relief, then make it last 10 years instead of 1.

Mitt Romney did not come out for or against extending the tax cut, but said he would rather have the cut on the employer's side to spur job growth. I agree. However, why not cut both sides of the payroll tax? Better yet, why not eliminate the payroll tax altogether and replace the lost revenue by closing loopholes or raising the capital gains tax. The payroll tax discourages hiring and hits both employers and low-wage earners fairly hard.

I am completely baffled as to why many Republicans suddenly want to increase taxes on all working Americans. It almost seems to validate the progressives' claim that Republicans only care about rich people and corporations.

What to make of questionable comments from GOP candidates

Last week was not a good one for GOP sound bites. The leading candidates made a couple of statements that, if interpreted a certain way, could lead one to wonder if the party is careening off an ideological cliff.

First, during the GOP debate, every single candidate said that they would walk away from a deficit deal that had $10 in spending cuts for every dollar in tax increases. That is absolutely crazy. Anyone who would actually veto that deal has no business running for president. It's extremely unlikely that they would get a deal that was even that good. Do they think Democrats are just going to disappear? Do they not realize that those ten dollars in uncut spending will mean higher taxes later on? Would they really turn down a chance to substantially reform entitlements and move closer to long-term fiscal health in exchange for, say, ending the Bush tax cuts?

Like the author of the above article, I think that the mainstream candidates in the debate were most likely lying, and simply pandering to the hard-liners in the GOP base. Their statements are thus mostly an indictment of a primary system that is dominated by the radical wing of each party and forces candidates to throw red meat to their base, whether they truly believe what they are saying or not.

Secondly, Mitt Romney proclaimed at the Iowa State Fair that "corporations are people." Again, there are two ways of interpreting this. It could mean simply that corporations are made up of people, and as Romney said, all the money that goes to corporations eventually goes to people. It could, however, also mean that corporations deserve the same constitutional rights as people, an interpretation which the DNC is already using to attack Romney. This is a policy position that was unfortunately legitimized by the Supreme Court in the Citizens United case--in my opinion, one of the most destructive decisions in recent history.

As I stated in my first post, businesses are more akin to governments than to individuals; they are collective organizations which increase overall wealth, security, and efficiency but must be carefully monitored and limited lest they usurp the power of the people. The Citizens United case gives corporations (and unions) undue power over the political process, and Republicans who actually believe that "corporations are people" risk being labeled as protecting corporate fat cats at the expense of ordinary people.

Two views on balancing the budget

Esquire today presented a very interesting left-right juxtaposition: two articles by former senators Gary Hart (D-Colo.) and Bob Packwood (R-Ore.) about balancing the federal budget. Here is Hart's article and here is Packwood's.

So who's right? Well, neither. Or both. Hart understandably decries the failure to regulate financial markets. Hart also correctly points out that the Iraq and Afghanistan wars combined with the Bush tax cuts were not good for the deficit. Given that both the wars and the tax cuts have continued for more than a decade, at this point they are responsible for a huge chunk of the federal debt.

Now, the Bush tax cuts, by themselves, were not a bad idea. Hart's biggest mistake is his refusal to acknowledge that tax cuts can stimulate the economy--a strategy that is part of Keynesian economics and worked undeniably well under both Reagan and JFK. The problem is, if you cut taxes you need to restrain spending, and Bush did exactly the opposite. Here's an idea: pass a law that requires a tax increase for any military operation that continues longer than 10 days. That will keep deficits down, and it might make the trigger-happy contingent of the GOP (which thankfully seems to be in decline) less likely to push for war.

Packwood's article discusses the worrisome increase in total federal spending, with a particular emphasis on entitlements. He is right on there: unless something is done to stop the runaway growth of entitlement spending, deficits will explode in the next few decades. However, by failing to discuss anything besides entitlements, Packwood exemplifies a certain conservative myopia. If the GOP focuses too much on slashing entitlements and leaves everything else alone, they will lose election after election. It would almost take a Vulcan to not see it as unfair for seniors and Medicaid patients to have to make all the sacrifices. While restraining entitlements are essential, fiscal conservatives need to be just as willing to consider things like dismantling the American empire, eliminating foreign aid, cutting federal payroll, closing tax loopholes, and probably--in a decade or two--raising taxes in some form.

"Terrorists" rhetoric completely crossed the line

With the signing of the debt deal, perceived as favorable to the GOP and the Tea Party, a whole mess of nasty rhetoric has come out of the woodwork. You might expect a leftist blog to compare the Tea Party to terrorists. It's a bit more surprising when you see a New York Times columnist claiming that the Tea Party has "waged jihad on the American people." Still, it's only an op-ed column.

However, when the Vice President of the United States says that the Tea Party "acted like terrorists," that's pretty despicable. He was responding to an even blunter comparison from Rep. Mike Doyle (D-Pa), who flat-out said that a “small group of terrorists have made it impossible to spend any money.”

Look, I realize political debates can get heated. You could call the Tea Party Republicans obstinate, pigheaded, or extremist, and I might agree with you somewhat. You could talk about GOP hypocrisy for not cracking down on spending when Bush was in office, a perfectly valid argument. You could call them cruel and heartless or talk about their supposed allegiance to millionaires and oil companies at the expense of the working class. Fine.

But terrorists? Terrorists want to blow up buildings and trains and kill people, ideally thousands of people. The Tea Party wants to cut government spending--that's it. Some people have tried to argue that the Republicans were leading the country toward default with their reluctance to raise the debt ceiling. That is hogwash. The government would still have had more than enough money to pay interest on the debt. The only way a default could have happened is if Congress decided that paying some bureaucrats in the Department of Energy was more important. The worst-case scenario was a government shutdown a la 1995.

So seriously, enough with the crazy rhetoric, or there might be knife fights in the Capitol before the end of the year.

The debt deal: kicking the can down the road

So, after a months-long fight over raising the debt ceiling, we finally have a deal. But what did it accomplish? Not much, according to this Washington Post analysis. In the words of Sen. Lindsey Graham:

“It’s a $3 trillion package that will allow $7 trillion to be added to the deficit over the next decade. We’re no longer running toward oblivion, we’re walking toward it.”


In the best-case scenario the deal will only cut 6-7% of federal spending over the next 10 years. That is ignoring the fact that federal spending is slated to increase by over 50% over the same time period. Meanwhile, unemployment is as high as ever. As fights go, the budget battle was reminiscent of the War of 1812, which featured years of nasty fighting and then a cease-fire that basically just restored the status quo ante bellum. 


In general, I like divided government. When one party controls the House, Senate, and the White House, they tend to do things like send us into a protracted war without a clear objective, or an exit strategy, or a way to pay for it. The downside of divided government, however, was on full display over the last few weeks. With Democrats stubbornly refusing to cut or reform entitlements, and Republicans stubbornly refusing to raise revenue by closing loopholes or eliminating tax subsidies, there was little chance of achieving significant long-term deficit reduction. They also ignored the ongoing jobs crisis in their obsession with the deficit, refusing to consider more small business tax cuts or infrastructure spending that could help reverse unemployment. Indeed, the only compromise they could settle on was just kicking the can down the road. 

The GOP's Test: Reality or Ideology?

Although the debt ceiling fight is by no means over, John Boehner and Harry Reid have come up with two plans that avoid raising taxes, and either of them seems to be a realistic option. One obstacle in the way of a completed deal is President Obama, who continues to push for a tax increase. However, it is doubtful that Obama would choose to veto a plan that passed the House and Senate and thus expose himself to the majority of the blame for a possible credit downgrade or any other adverse effects of the budget stalemate. The other obstacle is a number of House Republicans who continue to insist on more aggressive spending cuts and refuse to eliminate special tax breaks.

This, argues the Wall Street Journal, would be a big mistake, and I agree. The Boehner and Reid plans are not perfect, but they satisfy the GOP's #1 priority (no tax increases) and seem like they have support in Congress. If House Republicans torpedo them, they play into Obama's hands, allowing him to blame the GOP for the budget impasse. They then might be forced to accept a tax increase in order to avoid suffering the political fallout of the debt limit not being raised.

This is somewhat similar to the situation that Obama and the Democrats faced in 2009-10. They came into office with an impressive mandate, and the GOP's popularity was at historic lows as a result of the disasters of the Bush administration. With a down economy, the Democrats had an opportunity to cement a long-lasting majority by taking a center-left approach that focused on jobs (particularly private-sector jobs) and financial regulation while perhaps also expanding the safety net. Instead, they went whole hog, driven by their ideology instead of by the reality of the situation. They passed a stimulus that contained some good programs and tax cuts but was also stuffed with pork, did nothing for small businesses, and in the end was largely a disappointment. Then, despite continuing high unemployment, they abandoned the focus on jobs and passed ObamaCare, a decades-long liberal dream, without a single Republican vote. Immediately afterward, new hiring almost stopped. The Democrats were crushed in the 2010 election.

If the Republicans want to keep any of the gains they made in 2010, they need to learn from this mistake.

House GOP insists on spending cuts to reduce the deficit...then balks at military spending cuts

As I stated in my previous post, the government has a spending problem, period. Spending is projected to rise to unprecedented levels and I believe the Republicans are correct to take income tax increases off the table and insist on getting spending under control.

If they want to take this stand, however, then how can they refuse to make any defense cuts whatsoever, and pass a $649.2 billion appropriations bill that includes $118.6 billion for wars overseas? Not only did the House GOP refuse to freeze Pentagon spending at 2011 levels, they even refused to cut funding for military bands or Pentagon sponsorship of NASCAR.

This is not only stupid, but frankly, hypocritical. Yes, entitlements comprise the bulk of the long-term budget problem. But how can you repeatedly make a case for the need to cut spending, then refuse to cut ANY spending from a huge number of programs that you happen to like? This is the kind of political brinkmanship that needs to disappear from Washington, ASAP.

And House Republicans would do well to remember this quote from President Eisenhower, who if I recall correctly was both a general and a Republican:

"Every gun that is made, every warship launched, every rocket fired signifies in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed...Under the clouds of war, it is humanity hanging on a cross of iron."

Why the obsession over the deficit?

Obviously, the national debt is something that needs to be fixed in the medium term. We can't just keep spending like drunken sailors and leaving future generations with the bill. However, with unemployment still a major problem, is this really the time to crack down on deficit spending?

Let me use an analogy here. Suppose you are the coach of a pro sports team. One of your star players comes to training camp out of shape and having gained 15 pounds, and on the first day of practice he slightly tears the meniscus in his knee. Clearly, the best course of action would be to first repair his knee, then after his knee has healed get him back into shape. It seems like the Republicans, however, believe that it is best to immediately get him back into shape and pray that the knee doesn't get any worse. Major budget cuts certainly won't help employment, and they might make it worse. Is it really the right time to start making deep budget cuts?

Of course, the question that remains is how to fix private-sector unemployment. I can think of a few possible ways:

1. Cut corporate income taxes, while closing loopholes.
2. Eliminate some of the regulations that are most burdensome and expensive for businesses.
3. Declare a one-year payroll tax holiday, or eliminate it altogether (since the payroll tax is basically a tax on hiring).
4. Implement a tax credit or subsidy for buying American goods.
5. Invest in maintaining American infrastructure (which the 2009 stimulus somehow failed to do).

Naturally, none of these are very popular with partisans on Capitol Hill. #1 and #2 are anathema to Democrats, while #4 would be a tough sell to Republicans. #5 is not likely to survive the political process without being turned into something more "glamorous" (like a new museum) that a representative can show off to people in his/her district. And that is probably why the economy has been in a slump for nearly three years now and Congress still hasn't implemented even a half-decent solution.