Tax Holidays, Unemployment Extensions, and Small-Biz Write-offs

Which of these ideas to aid recovery sounds best?

Payroll tax holidays:

To stimulate the economy now with no long-term increase in government debt, Congress could temporarily exempt a portion of wages from the Social Security taxes imposed on workers; those exempted wages would not be credited in computing that worker’s future retirement benefits. This way, the Keynesians would get their stimulus, and the deficit hawks could sleep better at night.

This would mean that 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. Meanwhile, the later (post-retirement) cost of a temporary $1,000 tax cut would be spread over many years, meaning an annual pension reduction of only $100 or less.

Automatic Unemployment Benefit Extensions

In the 1970s, Congress worked on a system which had an automatic trigger built-in: whenever unemployment reached 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.

That trigger has ceased to exist, through a series of gradual alterations to the law. Reinstating it would ease the burden on states with high unemployment, and ease the anxiety of the unemployed Americans who now must wait and worry each time congress debates a new extensions.

Tax Write-offs

To get small businesses moving again, we should allow themto speed up the rate at which they can write off depreciating assets.Doing so would save employers money and spur entrepreneurialrisk-taking, without increasing the national debt.

-from the New York Times Opinion Page

Don't Hate Us Cause We're Apathetic

Despite facing a job market that could make a bilingual Harvard valedictorian soil her madras pants, a full 41% percent of job seekers this year turned down job offers. That's the same percentage that said "thanks, but no thanks" in 2007, when the economy was booming.

This peculiar statistic has been attributed to the large number of recent college grads who have recently entered the job market, and to the special breed of self-confidence that has flourished among their generation.

This NY Times article blames the strange sense of entitlement among the kids of Gen Y - aka the "why worry?" generation - on "parents who overstoked their self-esteem, teachers who granted undeserved A’s and sports coaches who bestowed trophies on any player who showed up."

But perhaps these well-educated (and, importantly, well-informed) college grads are just no longer willing to settle for the shitty hand their counterparts have played in years past. Maybe they are sick of employers taking advantage of a competitive market to expand the (already obnoxious) phenomenon of unpaid internships beyond part-time, supplemental learning experiences into full-time, full-responsibility, unpaid jobs.

I say right on, Gen Y. You may be hyperactive and cocky, but you sure know how to stick it to the man.

But stop having your Moms call work to negotiate your salary. That is just not cool.

Flat is the New Up

In this year's slow but sure economic recovery, the average profit for merger and acquisition deals is a big fat zero. But that flat line is a welcome sight when compared to the slower relative recoveries of the last two recessions.

As to why these deals aren't yet posting profits, this New York Times article explains:

"The trouble is that even though the United States economy has stopped contracting, big risks still weigh on the animal spirits of executives. Job growth is anemic and credit markets have had renewed volatility in the wake of Europe’s sovereign debt crisis. Such market turmoil may have played a role in scuttling Prudential’s bid for the American International Group’s Asian insurance business, and a $15 billion leveraged buyout of Fidelity National Information Services."

@mikebloomberg: chill with the tweeting

The City of New York is hiring, in a big way. While that is good news for the ranks of the unemployed, it may be bad news for the City itself. That's because the hiring is concentrated on the "exciting" and "forward-thinking" fields of social media and digital communications. And if past examples count for anything, New York just can't afford to go there right now. 

Remember the story Juan Gonzalez broke on CityTime, the admitted disaster of a computer project for which the city pays some 230 consultants an average salary of $400,000 a year to manage, despite it being seven years behind schedule and is hundreds of millions of dollars over budget? Yeah.

As just one element of this new project, Mayor Bloomberg will roll out his own social media arsenal consisting of Facebook and MySpace pages, a YouTube channel, and a Twitter feed.

I'm all for creating jobs, but this seems like it could be more like the most pricey bid for status points in the history of cool.

This Is A Beautiful Thing

Laid Off Mondays

free tequila shot with proof of unemployment, no cover / 12am

The Delancey 
168 Delancey,
btw. Clinton and Attorney Streets.
Lower East Side
(212) 254-9920

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Put all your belongings in a polka-dot handkerchief, then tie it to a broom-handle. Then make your way here and show off your poverty, for a prize. It's like the Depression, except with the added vagaries of global warming-era weather patterns.

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Schooling in a Slump

During the Great Depression, the high school graduation rate in the U.S. jumped from 30% to 50%, bringing on its heels an increase in skilled labor that helped save the economy.

Not surprisingly, the recession has sparked a similar phenomenon, but in higher education. The Bureau of Labor Statistics recently reported that the share of new high-school graduates enrolled in college rose to 70.1 percent last fall. That was up from 67.2 percent in 2007 and a new record. What's more, a 2009 study by the Pew Research Center found that the increase could be mostly attributed to community colleges, which tend to serve the very students who have been left behind in the past.

The problem is, college enrollment has actually been rising for the past few decades, with no such increase increase in actual graduations. Apparently, we're great at getting our kids to college, but we kinda suck at keeping them there.
Taylor Momse