How does a regular little guy fight entrenched power?
Arizona's Sixth Congressional District has a career politician Congressman, the fanatic Jeff Flake, who's standing in the way of full economic recovery and laughing in the faces of working people in the East Valley and all over America.
With his assaults on labor and working families, his outlandishly regressive tax policies and his slavish devotion to corporate power, this captive of K Street lobbyists Flake is blocking any attempts by the federal government to stop this onerous economic Great Recession.
In fact, he's happy about it. It's laissez-faire capitalism at its finest, says the foolish or fiendish Flake. Now his starve-the-beast philosophy of fiscal austerity and do-nothingism has spread, and we can't do any more stimulus or even help those who are under water, unemployed or struggling to pay bills like so many of us in the East Valley.
But here are three suggestions to go around our career-politician congressman:
First, Congress should grant workers a temporary holiday from the forced savings program known as Social Security.
To stimulate the economy now with no long-term increase in government debt, Congress should therefore temporarily exempt a portion of wages from the Social Security taxes imposed on workers; at the same time, those exempted wages would not be credited in computing that worker’s future retirement benefits.
For example, a 40-year-old earning $50,000 and paying annual Social Security taxes of about $3,000 could see those taxes cut to about $2,000. The added $1,000 in his paycheck, along with similar amounts for other workers, could be a huge stimulus to the economy.
In the future, of course, there would be a price to pay: the growth in that worker’s retirement benefits would be slightly reduced — much as if he had taken off four months without pay.
But the emphasis should be on “slightly.” Because benefits are typically paid over decades, the cost of a temporary $1,000 tax cut would be spread over many years; it could amount to a reduction in annual pension benefits of less than $100. The holiday could even be limited to workers under the age of 55, to allow plenty of time for them to salt away a few extra dollars for retirement once the economy improves.
Best of all, the costs and benefits would be matched to each worker. Those who get a pickup today would pay it back later on. This way, the Keynesians would get their stimulus, and the deficit hawks [like the predatory oddbird Jeff Flake] could sleep better at night.
Second, we need to block heartless, heedless, headless politicians like Jeff Flake from denying those who can't find jobs some relief.
Congress should restore the automatic triggers in unemployment compensation from the 1970s before nuts like Flake got in charge of the government (and they won't let go now, thirty years later!)
In 1970, Congress passed the Federal-State Unemployment Compensation Act, which established an automatic trigger: whenever unemployment increased to a certain point at a national or a state level, benefits were extended by 13 weeks.
The costs of these benefits were shared by the states, which paid them out of their regular unemployment insurance accounts, and the federal government, which increased taxes by about $8 per worker.
In the ’80s and ’90s, however, Congress diminished the effectiveness of the program by eliminating the national trigger, raising the state triggers and altering the trigger calculations in such a way that they hardly ever took effect
[Now], whenever a state’s total unemployment rate rises above 6.5 percent or jobless claims increase by more than 20 percent, benefits should be offered for an additional 20 or more weeks. This program should be fully financed by the federal government, thereby alleviating states’ burden during the recession.
An automatic trigger would provide a tailored response to those states with the worst labor markets and eliminate the need for Congress to revisit this issue every few months. Most important, we could reduce some of the uncertainty for the jobless.
Finally, Congress should allow small businesses to speed up the rate at which they can write off depreciating assets. Doing so would save employers money and spur entrepreneurial risk-taking, without increasing the national debt.
True, in the short term the government would lose tax revenue. But it is the same amount the government would lose by allowing the write-off anyway, just over a shorter period of time.
And there could be a fee for anyone using the accelerated schedule, equal to the interest the government would pay on the money it needed to borrow to cover its temporarily lost revenue.
Of course, Congress would want to make sure companies put their savings into new investments. To that end, it could devise a system for rewarding entrepreneurs based on the number of jobs per dollar depreciation created or the environmental worthiness of the project. And the accelerated write-off could be adjusted for specific assets across numerous industries, spurring development in areas where the public can most benefit, from new power plants to hospitals and nursing homes.
The tough part would be devising regulations and administering such a program. Politics is bound to intrude, though an independent review panel could help keep undue influence at bay.
Nevertheless, the reward for getting this policy right would be great — for government, investors, creditors and taxpayers — and it would encourage entrepreneurial enthusiasm throughout the economy.
With a little innovation and a lot of hard work (something our tropical-isle-vacationing congressman knows nothing about),
even before the voters boot out fishy fanatics like Jeff Flake, we can end this recession and put Arizona's working families in a better place.
