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Bulls & Bears
This week Brenda Buttner was joined by Tobin Smith; Eric Bolling; Pat Dorset; Matt McCall and David Goodfriend.
U.S. Keeps Spending as Other Nations Cut Costs
Eric Bolling, Fox Business Network: U.S. states want another $23 billion on top of the $150 billion they were requesting a couple weeks ago. These jobs bills keep costing us billions upon billions. In the meantime, we're helping bailout Greece and the European Union. Our country is already broke. We need to stop spending and do things like cut taxes, and help create real, long-term jobs.
David Goodfriend, radio talk show host: If you're trying to get your car out of a muddy rut, you lay your foot down on the accelerator and try to get the car out of there. It's the same concept in terms of getting our economy out of the worst recession since the great depression. We have to gun the car to get it out of this rut. If we continue this pace of job growth we saw over these past four months for the rest of the year, we'll have created more jobs than we did in the prior eight years combined. This spending is helping get our economy back on the right track.
Tobin Smith, NBT Media: We've finally come to a point where the business cycle is kicking in. We're finally beginning to see the economy recover on its own. But just when the economy starts to pick up, we start having these major issues over in Europe. Greece is showing us that if we actually do spend huge sums of money and continue plunging into higher levels of debt, our interest rates are going to go crazy. If interest rates skyrocket, then we really have to worry about the long-term condition of the economy, because the engine of growth is going to seize up. Let the business cycle do what it normally does.
Matt McCall, Penn Financial Group: I agree that the government should do a little bit of spending during a recession. But, our economy is recovering, things are getting better, and now it's time to stop the spending. If we do not stop now, we will turn into Spain, Ireland or Italy in short enough time. And suddenly, we'll be faced with the day where we have to pay the piper, and everything is going to blow up.
Pat Dorsey, Morningstar.com: What we have to do is have the political courage to change the debate from cheap political points around spending now, and whether stimulus is good or bad, and really focus-in on the difficult stuff like Social Security, Medicare, Medicaid, etc. —the costs of which are massive financial burdens to the country. There are only a few lone voices in Congress willing to talk about this. Let's have the courage to change the debate and talk about these real issues.
Report: Some Job Seekers Reject Offers, Stay on Unemployment
Matt McCall: This is ridiculous. If you can get free money to sit on your behind, and not go out and look for work, what are you going to do? Sit on your behind and not look for work. That's not what this country was built on. This country is built on innovation, and getting out there when times are tough. In Michigan, you make up to $387 week on unemployment. If you make $12 an hour landscaping, you make $350 after taxes. Where's the incentive to go out and get a job?
David Goodfriend: I think this is a made up problem and a made up story, with no hard data to back it up. We know that less than 7 percent of the unemployed are there voluntarily. So what's that mean? The vast majority of the unemployed wants a job and is hoping to find one. Of course there will be some who prefer collecting an unemployment check, but the American workforce as a whole is different than that. There's just a good collective work ethic.
Tobin Smith: A major study actually led by Larry Summers looked back at decades of unemployment data in the U.S. and found unemployment insurance causes the unemployed to stay out of a job longer. The data on this is clear. We find that people hold off on looking for work until the last week of the unemployment check. And this obviously keeps unemployment levels high.
Pat Dorsey: Receiving unemployment benefits for ninety-nine weeks seems a little excessive.
Eric Bolling: Touching off the numbers Matt raised, it really comes to the point where it just makes financial sense to stay home rather than looking for work. How can 99 weeks of unemployment insurance not be an incentive? Of course it is. People have every reason to wait for the 99th week to go out and try and find a job.
Spending Cuts to Solve California's $20 Billion Budget Gap?
Eric Bolling: Illegals in California should have been the first cut they looked at. California has 13 percent unemployment. There are about 4 to 5 million employed illegal immigrants in the state. If you get them out of the country, you open up 4 to 5 million jobs and get them off the unemployment dolls. And of course, the state would not have to worry about providing services like health care to illegals either — that'd save a tremendous amount of money.
David Goodfriend: We can't forget the tax revenue that comes from income and payroll taxes that illegal immigrants actually pay in California. Historically look at any economy that has welcomed an influx of immigration. You bring people into the lower economic strata and that allows everyone to move upwards.
Tobin Smith: I don't know how you ship out four million people. California has to focus on cutting the state benefits it gives out. If you stop the flow of illegal immigration, you tremendously reduce costs associated with Medicaid, food stamps, etc. The state could save over $12 billion right there. Some illegal immigrants may pay-in to the system, but they take up a disproportionate amount of the state services.