Writer disputes claims made by another
To the Editor:
I would be happy if Julia Schappals and I could just “agree to disagree,” but she has misstated so much of what I said, that I feel compelled to respond. Here are her verbatim statements and my responses.
1. “…her proposition that borrowing funds to create government jobs improves the economy.”
I never mentioned government jobs. Jobs like building roads, bridges, mass transit, etc., are contracted out to private businesses.
2. “The… stimulus… got an unemployment rate over 9 percent.”
The recovery act was signed into law in February of 2009, at which time the unemployment rate was already 8.2 percent and still climbing (Bureau of Labor Statistics).
3. “Ms. Boyer would have us believe that “make work” federal jobs magically leverage enough economic benefit to repay these amounts and then some.”
Once again, the stimulus is intended for private sector jobs.
4. “Despite the quote from the noble CBO, has anyone seen this happen in the years since the first stimulus?”
The CBO estimates that, as of the first quarter of 2011, the stimulus “increased the number of people employed by between 1.2 million and 3.3 million.” In addition to jobs, it also created new roads, bridges, etc.
5. “…why take that potentially economy-spurring money away from them (wealthy people and corporations) by raising taxes?”
If lower taxes “spur” the economy, why did the unemployment rate increase from 4.2 percent to 7.8 percent during the Bush administration, despite deep tax cuts (BLS)? The proposed termination of the Bush tax cuts on the top 2 percent wealthiest Americans has more to do with deficit reduction than job creation.
6. “Ms. Boyer believes business is corrupt”
I never said that business is corrupt. I did say that it is profit-driven.
7. “Ireland, for example, attracts hundreds of multinationals and has higher labor costs than the U.S. and certainly no “lax regulation.” But they have a 12.5 percent corporate tax rate.”
According to Eurostat, the unemployment rate in Ireland, as of May, 2011, was 14 percent, despite the low corporate tax rate.
8. “But, the best argument against another stimulus comes from Ms. Boyer when she acknowledges that after eight years of stimulus spending in the Depression, ‘unemployment remained in the double digits.’”
This is actually an argument for more stimulus. The new deal didn’t go far enough. More was needed, and it came inadvertently in the form of World War II. Infrastructure improvements could stimulate the same kind of growth.