Aiding unemployed smarter for economy

Republican Sens. John Kyl and John Cornyn and Republican Rep. Mike Pence, among other Republican office holders and candidates, have stated while we can't afford to aid the unemployed, cost is no object regarding extending tax cuts for the rich. They take the position that you should never have to offset tax cuts for the rich, being $678 billion, more than 20 times the $33 billion for unemployment benefits.

Even former Federal Reserve Chairman and Libertarian economist Alan Greenspan, who strongly advocated for the original Bush Administration and Republican Congress' tax cuts for the rich, now states he was wrong, and extending these tax cuts for the rich will be detrimental to the economy. Mark Zandi, chief economist with Moody's Economy.com and a former adviser to Republican Sen. John McCain, said the deficit dithering is just bad economics. He stated it's more important to get the benefits to the people who will immediately spend the money and help the economy.

In fact, Mr. Zandi stated that tax cuts for the rich only provide between 6 to 7 cents in stimulus benefit for the economy for every dollar foregone, while federal government stimulus funds provide $1.60 to $1.70 in stimulus benefit for every dollar. This is similar to the analysis set forth in Kevin Phillips' 2007 book "American Theocracy." There, Mr. Phillips noted that the Bush Administration's lowered rates on capital gains and dividends were calculated to produce only 9 cents of stimulus benefit for every dollar of foregone revenue, and the reduction of overall rates only 59 cents on the dollar. However, he noted that the small amount of federal aid to state governments in the Bush package was rated at a more effective $1.24 of stimulus benefit for every dollar.

So why bother helping the unemployed when those tax cuts might result in unlimited campaign contributions thanks to the recent Citizens United decision by the Supreme Court?

Tom Bartlett-Svehla

Mundelein