Unemployment might be stuck at crisis levels, but a new government report suggests two commonly proposed Republican remedies would only have minimal effects.
Deregulation and a tax holiday for repatriated corporate earnings would do little to create new jobs, the report from the Congressional Budget office finds. Examining 13 ways to stimulate the economy and job market, the report contends that the impact of deregulation would be too slow and small to have any sort of immediate effect, while taxing repatriated corporate earnings at a lower rate would at most create a single year of full-time employment for every million dollars in federal costs required.
Both deregulation and a corporate tax holiday have been popular talking points of late, with corporations including Pfizer and Apple arguing a repatriation tax holiday would give them the extra cash to create American jobs, and Republicans often insisting large number of regulations have stifled job creation.
Both ideas have come under heavy scrutiny though, as when Bruce Bartlett, former economist for both Ronald Reagan and George W. Bush said that the idea that deregulation create jobs "is just nonsense. It's just made up."
History also shows repatriation tax holidays have done little to stimulate job growth. A recent report found that during the last tax holiday in 2004, 58 of the corporate giants that accounted for 70 percent of all repatriated cash slashed nearly half a million jobs in the following years. Even the Heritage Foundation, a conservative think tank, have changed their tune on the idea of a tax holiday.
The CBO report instead contends that extending unemployment benefits is the best way to create new jobs in the short term. The Center of American Progress recently supported this claim by arguing unemployment benefits provide the greatest benefit to the labor market when unemployment is at its worst. Indeed, according to a 2010 report by the Urban Institute, for every dollar the government spends on unemployment benefits, two are put back into the economy.
The contention is supported by another report, this one by the Census, finding unemployment benefits were responsible for the creation of an average of 1.6 million jobs each quarter between mid-2008 through mid-2010, while simultaneously keeping an estimated 3.2 million people out of poverty.
Here are 13 ways to boost job creation by 2012 to 2013, according to the Congressional Budget Office: