The proposed tax compromise between the Dear Leader, President Obama, and senate negotiators extends the current tax rates for another two years.
That is the very minimal good news. There will not be a tax hike for two years, at least.
But the bad news is that the extension is not permanent. Barring that possibility, a victory for the Democrats, the most that senate Republicans could get out of the Dear Leader, President Obama, was a two-year extension.
And to gain any Democrat support, it meant giving another extension of unemployment benefits another 13 months.
The point of the original reduction of tax rates during the early days of the George W. Bush administration was to have more money in the private sector to spur economic growth. And with that growth jobs would be made and unemployment would come down. And that did happen.
But, what this compromise means is that President Obama will have the tax issue again in 2012 when he is certain to run for reelection. And he and the Democrats will get a unemployment benefit of 113 weeks. Do the math. That is over two years.
What the Republicans should do, and they still can, is have a five-year extension of the current tax rate. Maybe by that time, there can be a Republican president and congress that can seriously tackle the issue of real tax reform, once and for all.
It does appear that Congressman Michelle Bachmann is going to lead Republican opposition to this in the House.
And this is my point.
If the economy is to truly and totally recover, the job market must be plentiful. And people need to be in the market. Some people have already given up as the market is not plentiful and there is no incentive to look for any kind of work. When one can get up to 99 weeks of unemployment, it may not be like a paycheck one received. But it is something. And a job seeker has no real incentive to get out and get some kind of employment.
Thus it is important to realize that it will be the private sector that will lead the recovery, not the government. And that means stopping the madness of extending unemployment until the cows come home.
This tax compromise must be renegotiated because it is not good for this nation and not good for the long term economy.