Did the Stimulus Create Jobs?

 

Yes, the stimulus legislation increased employment, despite false Republican claims to the contrary.
September 27, 2010

Summary

The economic stimulus package is a favorite target of Republican candidates and groups, but more than a few ads falsely claim it did not create or save any jobs. Some recent examples:
  • Republican House candidate Dan Debicella charges that Democratic Rep. Jim Himes failed Connecticut’s families because he voted for a "stimulus package that has done nothing to reduce unemployment."
  • Rick Scott, the Republican candidate for governor in Florida, says Democrat Alex Sink "backed the failed stimulus bill, which created debt, not jobs."
  • Similarly, Sink — who never served in Congress and didn’t vote on the bill — is attacked by the Republican Party of Florida in an ad that says the stimulus "gave us big debt and no jobs."
  • Americans for Prosperity, a conservative group that does not have to disclose its donors, aired an ad against Democratic congressional candidate Denny Heck of Washington that claimed the "$787 billion stimulus … failed to save and create jobs." The group has launched similar ads against other Democrats.
  • Kristi Noem, a Republican House candidate from South Dakota, calls the measure a "jobless stimulus."
The truth is that the stimulus increased employment by between 1.4 million and 3.3 million people, compared with what employment would have been otherwise. That’s according to the nonpartisan Congressional Budget Office.

Analysis

The American Recovery and Reinvestment Act, more commonly known as the stimulus bill, has been featured in more than 130 TV ads this year, according to a database maintained by Kantar Media’s Campaign Media Analysis Group. In many of those ads, Republicans claim the bill has "failed" (a matter of opinion) or state (correctly) that unemployment has gone up since President Barack Obama signed the bill into law on Feb. 17, 2009. The national unemployment rate was 8.2 percent in February 2009, and it now stands at 9.6 percent, having peaked at 10.1 percent in October 2009.
But it’s just false to say that the stimulus created "no jobs" or "failed to save and create jobs" or "has done nothing to reduce unemployment" – or similar claims that the stimulus did not produce any jobs.
As we have written before, the nonpartisan Congressional Budget Office released a report in August that said the stimulus bill has "[l]owered the unemployment rate by between 0.7 percentage points and 1.8 percentage points" and "[i]ncreased the number of people employed by between 1.4 million and 3.3 million."
Simply put, more people would be unemployed if not for the stimulus bill. The exact number of jobs created and saved is difficult to estimate, but nonpartisan economists say there’s no doubt that the number is positive.

Debicella for Congress TV Ad: "Rubber Stamp," aired Sept. 9-10
Rick Scott for Governor TV Ad: "Wrong Solutions," aired Sept. 14
Republican Party of Florida TV Ad: "Whatever it Takes," aired Sept. 4-7
Americans for Prosperity TV Ad: "The Truth About Heck," aired Aug. 18-22
Noem for Congress TV Ad: "Serve," aired Sept. 14-15
– by Joshua Goldman

Sources

H.R. 1. "American Recovery and Reinvestment Act of 2009." GovTrack.us. accessed 27 Sep 2010.
Labor Force Statistics from the Current Population Survey, Unemployment Rate. Bureau of Labor Statistics. accessed 27 Sep 2010.
Posted by FactCheck.org on Monday, September 27, 2010 at 5:42 pm

"In September"

A wonderful music video written and performed by a dear friend. 
A tribute with a conscience to September 11.













Test of downloding

Test of downloading
Elizabeth Warren: An Okie in Washington riles Wall Street Oklahoma native Elizabeth Warren is among the leading candidates to head the newly minted Consumer Financial Protection Bureau. Some financial insiders are not pleased.

BY DON MECOY
Oklahoman   
Published: August 1, 2010

NORMAN — At ease amid noisy young relatives and family photos in her brother's Norman home, Elizabeth Warren doesn't seem like a person at the center of a fierce political battle that stretches from Wall Street to the White House.

But Warren, an Oklahoma native who is a leading candidate to head the Consumer Financial Protection Bureau that she helped create, has been the target of invective from financial insiders who fear her ideas.

Anton Schutz, president of Mendon Capital Advisers, last week said in a Reuters story: "I get disgusted every time I hear her speak." Warren, 61, is baffled by the invective.

"I have never run into anything like what has happened the past few weeks," she said. "I found myself thinking: So what is it I say? I'd really like the content."

Her goal, she said, is what it has been throughout the 20 years that she's been researching financial data, particularly as they relate to American consumers, whom she believes have been victimized by predatory practices.

"I want to make it so regular families can read a credit card agreement in four or five minutes and fully understand what the terms are. No tricks. No traps. No things that you don't figure out what's happening until after it bites you and they charge you the $39 and raise your interest rate to 29 percent," she said.

Financial insiders point to Warren's lack of industry experience as evidence that she doesn't grasp the complexities of their business or the impact regulatory changes would have.

"I do understand," she said. "It's that we disagree. There are some things that I don't think are all right, and people who are making money off of it think it's just fine."

Last week, White House press secretary Robert Gibbs labeled Warren "a terrific candidate" to head the Consumer Financial Protection Bureau. Asked if "Wall Street opposition" to Warren's potential nomination would factor into the president's decision, Gibbs said: "I don't think any criticism in any way by anybody would disqualify her."

Always an Okie

Warren attended grade school in Norman, then skipped sixth grade when her family moved to Oklahoma City. Living on NW 25 Street, she learned to drive the family Studebaker in the parking lot of the brand new Shepherd Mall.

She graduated from Northwest Classen at 16 as a debate champ, which earned her a college scholarship.

She became a teacher to brain-injured children, but felt stifled by the administrative constraints of the New Jersey public school where she worked. During a Christmas visit to Oklahoma City, her former high school debate classmates urged her to attend law school.

After operating a private law practice, Warren returned to her first love of teaching.

"As a teacher at that level, you do research — that's just part of the job," she said. "The area where I was teaching were all the money courses — commercial law, contract law, bankruptcy law. That's where my research was, and that's when I started doing research on families that went broke."

It's a topic she knows something about. Before Warren was born, her parents lost most of their savings when a partner in a planned car dealership in Seminole absconded with their money.

Her father, a self-taught pilot who was a flight instructor in Muskogee during World War II, worked as a traveling salesman and in Oklahoma City, at Montgomery Ward. He was demoted after suffering a heart attack, and later took a job as a maintenance worker at an apartment house. The working-class family couldn't afford to send Warren to kindergarten, which at the time was offered only at private schools.

"Sure it was partly about my family, but it was about millions of other families," the Harvard law professor said of her research. "That was the work I started doing. That's how I ended up where I am today."

Warren has written numerous books and academic articles. Her work uncovered the fact that most American consumer bankruptcies are not filed by financial freeloaders, but by people whose finances have unraveled due to divorce, death or health crises.

Not a politician

Warren's public profile grew through her consumer advocacy, although she was unsuccessful in her attempts to derail the 2005 bankruptcy reform pushed by the financial industry.

In the wake of the financial crisis, Warren was appointed to head the Congressional Oversight Panel charged with reviewing the Treasury Deparment's implementation of the $700 billion Troubled Assets Relief Program, commonly called TARP.

Her Oklahoma upbringing is evident in the blunt, basic questions she asks during hearings, and she recognizes her style differs from the typical Washington way.

"These people aren't used to simple questions. They don't expect to hear them and they somehow, when you do (ask them), act like you're not half-bright or you're somehow asking something nasty," she said.

When asked if TARP has been a successful use of taxpayer dollars, Warren doesn't evoke economic theories or delve into the fallout from overly complex financial instruments.

"It's like having a garage sale and you know what you paid for each thing you're now going to resell and the good stuff is resold at a profit so it looks like you're making good money. Yeah, but how about the stuff that's still left behind? That's where the problem is — AIG, GMAC, GM, Chrysler, Citi," she said. "How fully the American taxpayer gets paid back, we don't have enough information to tell for sure."

While her plainspoken ways may annoy some, Warren is no fan of business as usual in Washington.

"What's begun to hit me is that people have enormous power and yet nobody's ever responsible," she said. "How does that happen? Nobody's ever accountable. Nothing is ever anybody's fault. I hope that the way this new agency works out is not just that it has the tools to get things done — it's accountable for making change."

Warren pushed for agency

For several years, Warren has called for the creation of a government agency charged with protecting American consumers on financial matters. She repeatedly has noted that toasters are more strongly regulated than financial products.

She admits her major role in the creation of such an agency is "pretty cool." While reluctant to discuss her potential nomination as head of the Consumer Financial Protection Bureau, she acknowledges that the choice of who leads the agency is an important one.

"I care about the changes that need to be made for middle-class families," she said. "That's what this new agency is all about. It's what my work has been about for 20 years. ... the lights suddenly come on because we're talking about Washington and some big stir there, but the truth is, for me this is just a logical extension of what I've been working on for more than 20 years."

However the political matters work out, Warren will continue to return to Oklahoma several times a year.

"My brother David is the best storyteller God has put on this earth," she said. "There's nothing I'd rather do than sit on the back porch and listen to him tell the story of the time they put the pig on the motorcycle and ran it down the main hall of Norman High."

"I'll always be an Okie."




ELIZABETH WARREN

Age: 61

Occupation: Harvard Law School Leo Gottlieb Professor of Law, currently on leave. Chair of the Congressional Oversight Panel that reviews implementation of the government's $700 billion Troubled Asset Relief Program.

Previous employers: The University of Pennsylvania Law School, 1990-95; The University of Texas School of Law, 1981-87; The University of Houston Law Center, 1978-83. The University of Michigan, 1985. Rutgers School of Law (Newark). 1977-78.

Books written: "All Your Worth: The Ultimate Lifetime Money Plan," 2005 (A New York Times bestseller). "The Two-Income Trap: Why Middle-Class Mothers and Fathers Are Going Broke," 2003. "The Fragile Middle Class: Americans In Debt," 2000. "As We Forgive Our Debtors: Consumer Credit and Bankruptcy in America," 1989. Plus about a dozen academic legal books.

Recognition: Named one of Time magazine's "100 Most Influential People in the World" in 2009 and 2010. Named "Bostonian of the Year" in 2009.


Read more: http://newsok.com/elizabeth-warren-an-okie-in-washington-riles-wall-street/article/3481388#ixzz14mqDCByt

2011 Tax Increases


September 3, 2010

Q: Will "the largest tax hikes in the history of America" take effect next year? Will ordinary taxpayers see taxes "skyrocket"?
A: That’s not likely. A scary e-mail lists "Tax hikes in 2011" that probably won’t take effect, or won’t apply to families making under $250,000 a year. One "tax hike" is pure fiction.


FULL QUESTION

Hello, I’m forwarding an e-mail apparently from the conservative bureau of misinformation. My friend who forwarded it isn’t very up on the news and politics and was scared to death that her tax will skyrocket next year… even though she makes way less than $250,000.
Thanks for all the great works you guys and gals do!
Subject:Tax Hikes in 2011
In just six months, the largest tax hikes in the history of America will take effect. They will hit families and small businesses in three great waves on January 1, 2011:
First Wave: Expiration of 2001 and 2003 Tax Relief
In 2001 and 2003, the Congress enacted several tax cuts for investors, small business owners, and families.
These will all expire on January 1, 2011:
Personal income tax rates will rise. The top income tax rate will rise from 35 to 39.6 percent (this is also the rate at which two-thirds of small business profits are taxed). The lowest rate will rise from 10 to 15 percent. All the rates in between will also rise. Itemized deductions and personal exemptions will again phase out, which has the same mathematical effect as higher marginal tax rates. ⬐ Click to expand/collapse the full text ⬏
FULL ANSWER
We’ve been flooded with inquiries about various versions of this chain e-mail, which has been circulating since July. It grafts together a set of misleading claims issued by the conservative Americans for Tax Reform with a fictional claim about taxation on health insurance benefits.
The W-2 Fiction, Again
Let’s dispose of the bogus health insurance claim first. It’s not true that "you will be required to pay taxes" on the value of employer-paid health insurance benefits. This is a falsehood that circulated earlier as a separate chain e-mail. See our May 22 article, "Health Care Law and W-2 Forms," for full details.
It’s true that the new health care law requires employers to report the value of health insurance benefits on W-2 forms starting next year, but that’s for informational purposes only.
The remainder of the chain e-mail message contains misleading claims about what "will" happen next year that were copied and pasted — nearly word for word — from an Americans for Tax Reform document dated July 1. (The garish colors were added by the anonymous author of the e-mail message.) For the most part, these are "hikes" that the president and Democratic leaders in Congress have long said they won’t allow to take effect, except for individuals making more than $200,000 a year, or couples jointly making more than $250,000.
Bush Tax Cuts: Mostly Slated for Extension
Both the e-mail and the ATR document claim that all the tax cuts enacted in 2001 and 2003 and signed by President Bush "will all expire on January 1, 2011." Actually, that’s not what’s expected to happen at all. It’s true that the cuts are scheduled to expire, but they will expire only if Democrats who control the White House and Congress fail to do what they’ve promised.
Particularly misleading are the claims that "[t]he child tax credit will be cut in half from $1000 to $500 per child" and that "marriage penalty" relief will expire. As veteran congressional reporter David Rogers, who writes for Politico, put it back in July: What Democrats are debating is not whether, but "when — and for how long" to extend the Bush tax cuts that apply to lower and middle-income taxpayers.
In fact, some key Democrats now favor extending all the Bush tax cuts for at least one more year — even for upper-income taxpayers. Those lawmakers include Sens. Evan Bayh of Indiana, Ben Nelson of Nebraska and Kent Conrad of North Dakota, as well as some Democratic House members. So unless Congress deadlocks (always a possibility), the most likely outcome now is that Congress will either extend most of the cuts — as President Obama promised again and again during the 2008 campaign and since — or extend all of them, at least for a while longer.
‘Death Tax’: Only on Multimillion-Dollar Estates
The message is also misleading in what it says about the temporary repeal of the federal estate tax — which Republicans like to call the "death tax." Under terms in the Bush tax cuts, the estate tax was phased down over several years and eliminated entirely for those who die in 2010, but it’s set to return in 2011 at levels that prevailed before 2001. So just as the message says, for those dying after Jan. 1 next year, estates of more that $1 million would be subject to taxation at rates as high as 55 percent on amounts over that threshold. But that will happen only if Congress fails to act, and there’s little sentiment in Congress, even among Democrats, for allowing that to happen.
In fact, last December the House passed a bill that would have permanently exempted estates of up to $3.5 million from taxation (effectively, $7 million for couples). The top rate would have been 45 percent. All 225 House members who voted for that were Democrats; Republicans opposed the measure because it would have frozen the estate tax at the 2009 level called for in Bush’s phase-down, and would have canceled Bush’s one-year repeal in 2010.
In the Senate, several Democrats want to bring back the estate tax with an even higher exemption and a lower rate. In April 2009, the Senate adopted an amendment to a budget bill that would have set as a target a $5 million exemption ($10 million for couples) and a top rate of 35 percent. The bipartisan amendment was sponsored by Democratic Sen. Blanche Lincoln of Arkansas and Republican Sen. Jon Kyl of Arizona. It passed with 51 votes in favor — 10 of them from Democrats, even though the Senate’s Democratic leadership (and President Obama) had set $3.5 million as a target. The Senate amendment wasn’t accepted by the House, which insisted on keeping the $3.5 million threshhold in the budget bill. With its Democrats divided, the Senate ultimately failed to act on the estate tax, allowing it to expire entirely for 2010.
So Congress has yet to agree on whether to bring back the estate tax only for estates worth more than $3.5 million, or only for those over $5 million. Few if any voice support for bringing it back for estates of more than $1 million. That could happen if the deadlock on this issue continues (again, always a possibility). But majorities in the House and Senate have voted to impose the so-called "death tax" only on multimillionaires.
A ‘Wave’ of ‘Obamacare’ Taxes?
The e-mail describes a "second wave" of tax increases that it says will take effect Jan. 1 under the new health care law. But this "wave" consists of three relatively minor tax changes that affect relatively few people.
  • What the e-mail describes as a "Medicine cabinet tax" simply aligns rules governing health savings accounts (HSAs), Flexible Spending Arrangements (FSAs) and Health Reimbursement Arrangements (HRAs) with the tax rules that apply to deducting medical expenses generally. Under current law, taxpayers in general are not allowed to deduct the cost of non-prescription drugs as a medical expense. The only exception is for insulin. But those with HSAs, FSAs and HRAs were allowed to use pre-tax dollars to buy aspirin, over-the-counter cold and allergy medications, and other drugs available without a doctor’s prescription. The new "tax" simply says HSAs, FSAs and HRAs can’t be used to buy these medications — except for insulin — after December 31. (See pages 69 and 70 of the Joint Committee on Taxation’s "technical explanation" of the revenue measures in the new health care law, which can be downloaded from the committee’s website. This will affect a small proportion of taxpayers. For example, the health insurance industry says 10 million persons were covered by HSAs as of January of this year, roughly 3.2 percent of the population. For that relatively small group, the change does amount to a tax increase. It will bring in a total of $5 billion over the next 10 years, the JCT estimated in its "Estimated Revenue Effects" of the new law.
  • The "HSA withdrawal tax hike" refers to a doubling of the current 10 percent penalty that must be paid on any HSA funds spent for something that’s not a qualified medical expenditure. (See pages 71 to 73 of the JCT technical explanation.) The JCT expects that to bring in $1.4 billion over 10 years.
  • The "special needs kids tax" refers to a cap of $2,500 that the new law places on spending from FSAs. (See pages 74 to 77 of JCT’s technical explanation.) The argument made in the e-mail is that "many" families with special needs children now use FSAs to pay tuition at private schools catering to special needs children, schools that ATR says "can easily exceed $14,000 per year" in Washington, D.C. Perhaps so. IRS rules do allow use of FSA funds to pay for such expenses with pre-tax dollars. But the e-mail message offers no evidence of how many families might be taking advantage of this tax break currently. The claim is copied from the website of Americans for Tax Reform, but as ATR itself says: "For most people, the $2500 cap won’t be noticed." As ATR concedes, FSAs "tend to be used for things like small deductibles, co-payments, eyeglasses, over-the-counter medicines, and laser eye surgery." The amount deferred in the typical FSA is probably much less than $2500 today, ATR says. The JCT expects the change will bring in $13 billion over 10 years, but says nothing about how much of that is likely to come from the pockets of parents of special needs children.
We don’t argue for or against any of these three tax increases. We simply point out that, even taken together, they amount to less than $2 billion per year and, therefore, don’t constitute anything close to a "wave" of historically large tax increases taking effect next year.
Alternative Minimum Tax
The message flatly claims that the Alternative Minimum Tax will suddenly "ensnare over 28 million families," forcing them all to pay higher taxes. But historically, Congress has repeatedly refused to allow that to happen.
The AMT was originally enacted in 1969 to cover a few very high-income individuals, but it was not indexed for inflation. So it has come to be a headache for several million taxpayers, and would hit even more if Congress had not enacted a series of "patches" each year since 2001.
The Tax Policy Center calculates that next year 28.5 million taxpayers would have to pay higher taxes on their 2010 returns if the usual patch is not extended. But Obama’s stimulus bill extended the patch through 2009, holding down the number of taxpayers affected to just 4 million. And there’s no reason to think that Congress will fail to extend the patch for 2010 taxes. In fact, President Obama’s budget assumes that a permanent fix will be enacted, holding the AMT to levels in place for 2009. That’s something President Bush never proposed.
Tax Extenders
The message goes on to claim that businesses will lose a host of tax benefits, including a research tax credit; that teachers will no longer be allowed to deduct classroom expenses (high-school and grade-school educators can now deduct up to $250 a year); and that persons with Individual Retirement Accounts will no longer be able to use them to make charitable donations. But these are tax provisions that have been routinely renewed in the past, and Congress has strongly signaled that it intends to renew them for 2011 as well.
The fact is that on Dec. 9 last year, the House voted 241 to 181 to approve the "Tax Extenders Act of 2009." That bill called for extending for one more year a long list of expiring tax breaks, including the business research tax credit (Section 111, page 6),  the $250 deduction for teachers buying classroom supplies (Section 104, page 6), and tax-free distributions from individual retirement plans for charitable donations (Section 135, page 14).
The Senate passed the bill on March 10, by a vote of 62 to 36, leaving the extenders intact. The fate of those extenders is still in limbo — but majorities in both houses are clearly on record favoring them.
–Brooks Jackson
SOURCES
Ellis, Ryan. "Six Months to Go Until The Largest Tax Hikes in History." Americans for Tax Reform. 1 Jul 2010.
Rogers, David. "Dems tiptoe around Bush tax cuts." Politico.com. 14 Jul 2010.
Vaughan, Martin and John D. McKinnon. "Democrats Dissent on Bush Cuts." The Wall Street Journal. 22 Jul 2010.
Bolton, Alexander. "Dems may keep Bush tax cuts." The Hill. 22 Jul 2010.
"House Votes to Extend Tax on Estates of the Wealthy." The Associated Press. 3 Dec 2009.
 U.S. Senate 111th Congress - 1st Session. Vote #146. 15 Jan 2009.
Center for Policy and Research, America’s Health Insurance Plans. "January 2010 Census Shows 10 Million People Covered by HSA/High-Deductible Health Plans." May 2010.
Ellis, Ryan. "Senate Health Bill Raises Taxes On Special Needs Kids and Their Families." Americans for Tax Reform. 20 Nov 2009.
Burman, Len and Jeff Rohaly. "Alternative Minimum Tax: What is the AMT?" Tax Policy Center. 7 Oct 2009.
"Historical AMT Legislation." Tax Policy Center. 16 Mar 2009.
 "Aggregate AMT Projections, 2009-2020," Table T10-0106. Tax Policy Center. 3 May 2010.
 "2011 Budget Tax Proposals; Index 2009 parameters of the AMT to inflation." Tax Policy Center. Undated Web page, accessed 3 Sep 2010.
U.S. House of Representatives 111th Congress - 1st Session. Vote #943. 9 Dec 2009.
111th Congress - 1st Session; H.R. 4213 "Tax Extenders Act of 2009" (As approved by the House). 9 Dec 2010.
U.S. Senate 111th Congress - 2nd Session. Vote #48 10 Mar 2010.
111th Congress - 1st Session; H.R. 4213 "Tax Extenders Act of 2009" (As approved by the Senate). 10 Mar 2010.
 Sahadi, Jeanne. "100-plus tax breaks on the line." CNNMoney.com. 25 Aug 2010.