Athens, U.S.A.Rep. Sander Levin, D-Mich., has answered the question of whether the United States has learned anything from the disintegration of Greece's economy. His response, in the form of a massive new spending package, is, "Of course not." The Royal Oak Democrat and new chairman of the House Ways and Means Committee dropped the $190 billion American Jobs and Closing Tax Loopholes Act into the hopper this week. It purports to stimulate the economy by spending more on welfare and pork, and paying for it by jacking up taxes on businesses. It's a bill that could have been written in Athens. The legislation follows closely the formula of the initial $862 billion stimulus program, which has yet to make a noticeable dent in the jobless rate. It's hard to see how different results will be achieved with this spending add-on, particularly since the largest chunk of the money, nearly $65 billion, will go to avoid a reduction in Medicare reimbursements to physicians, a payoff promised in exchange for their support of Obamacare. Another $24 billion will go to states to ease their Medicaid burden; $47 billion is targeted to extend unemployment insurance benefits; and $7.8 billion will be used to pay for health insurance for the unemployed. These may well be worthwhile endeavors, but they aren't likely to create jobs. Neither will the $4.6 billion set aside for payments to minority farmers (all other farmers will be in line for $1.5 billion in additional disaster relief).
The only piece of the bill that might actually stimulate job creation — a program to get loans to small businesses — is funded at a measly half-billion dollars. Paying for all this new spending will mostly be on the credit card — it will add $134 billion in new debt. It also comes with a smorgasbord of new taxes on businesses. This is the loophole closing aspect of Levin's proposal. Businesses are most worried about provisions to tax multinational corporations at a higher rate, and to raise taxes on the managers of private equity funds that provide capital to businesses. Concerned that oil companies are becoming too profitable — as if that's a legitimate worry about any industry in this economy — Levin proposes tagging them with a 24-cent per barrel surcharge. That can be expected to show up in higher gasoline prices for the consumer as soon as it's levied. Increasing government spending while raising taxes on businesses has produced economic stagnation everywhere it's been tried, most notably Greece. Why Levin would expect different results here is unclear. But this sort of deficit spending on massive new government programs that produce questionable results is just the thing that has Americans so uneasy about what's happening in Washington. Throwing good money after bad is not going to calm the waters. REPRINTED FROM THE DETROIT NEWS DISTRIBUTED BY CREATORS.COM
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