Economist Robert Reich wants President Barack Obama to take six specific steps to create jobs.
First, exempt the first $20,000 of income from payroll taxes for the next two years and make up the revenue shortfall by applying Social Security taxes to incomes over $500,000. "This will put cash directly into American's pockets and boost consumer spending, Reich writes in his blog.
Next, recreate the WPA and Civilian Conservation Corps — two of the most successful job innovations of the New Deal — and put people back to work directly.
"The long-term unemployed will help rebuild our roads and bridges, ports and levees, and provide needed services in our schools and hospitals," wrote Reich, now a professor of public policy at the University of California at Berkeley.
"Young people who can't find jobs will reclaim and improve our national parklands, restore urban parks and public spaces, recycle products and materials, and insulate public buildings and homes."
(Associated Press photo)
Third, enlarge the Earned Income Tax Credit so lower-income Americans have more purchasing power.
Fourth, lend money to cash-strapped state and local governments so they can rehire teachers, fire fighters, police officers, and others who provide needed public services.
"This isn't a bailout," Reich says. "When the economy improves, scheduled federal outlays to these states and locales will drop by an amount necessary to recover the loans."
Fifth, amend the bankruptcy laws so struggling homeowners can declare bankruptcy on their primary residence.
"This will give them more bargaining leverage with their lenders to reorganize their mortgage loans,"" wrote Reich, who served in three national administrations and was a secretary of labor under President Bill Clinton. "Why should the owners of commercial property and second homes be allowed to include these assets in bankruptcy but not regular home owners?"
Finally, Reich wants to extend unemployment benefits to millions of Americans who have lost part-time jobs, giving partial benefits proportional to the time they put in on the job.
Reich acknowledges that most of these measures will require more public spending in the short term. “But unless we get this economy moving now, the long-term deficit problem will only grow worse,” he says.
“My most important goal is restoring jobs and wages. Those who oppose me must explain why doing nothing is preferable.”
Voice of America News reports that the unemployment rate in the United States increased to 9.2 percent in June, the highest level this year.
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