The Jobless Recovery
Many experts envision a jobless recovery, in which the economy grows but job losses persist. Economistsnow predict unemployment will peak at 10.5% next June, fall to 9.1% by 2011 butstill be at 8.1% in 2013. So what can be done? There was bipartisan agreement among a top economist, a big businessman and a Democratic and Republican Governor, for more powerful taxpolicy to stimulate the economy and create jobs. Michigan Gov. Jennifer Granholm, a Democrat,called for more tax incentives to create jobs as well as extending unemployment benefitsinher statewhich has 15.2%unemployment--the highest in the nation. "It would be good to see another targeted tax policy," Granholm told Chris Wallace on FOX News Sunday. "If you can target tax incentives to job creation and job growth." Businessman Steve Wynn, Chairman and CEO of Wynn Resorts,agreed the most powerful tool the government has is its tax policy. "The priorities of the administration should have been more directly focused on job creation from the day of the inauguration forward. That's the thing that changes America,"Wynn said. "If the government had used its power to restrain its tax collection, they would have given everybody who runs small businesses, large businesses, a chance to hire more people," he added. According to Wynn, job creation is about the proper role of government intervention--none at all. Wynn claimed, "Government has never increased the standard of living of one single human being in civilization's history." Republican Gov. Mitch Daniels of Indiana,pointed to his experience of erasing the deficitand creating jobs without raising taxes. "We're in the middle of the biggest road-building, infrastructure- building, project in state history. We did it without a penny of taxes or borrowing," Daniels told FOX News Sunday. Top economist Mark Zandiclaims the stimulus is working because of the benefits and tax cuts provided to individuals and businesses. "Of the $787 billion stimulus package, $300 billion of that was tax cuts to individuals and to businesses, Cash for Clunkers, tax credits for home purchases," Zandi said. "Almost every state governor would say that they've been helped by the stimulus quite significantly. They'd be cutting even more aggressively if not for that." Zandi, who helped Congressional Democrats write the first stimulus, alluded to a possible second stimulus, but favors extending specific aspects of the current plan. "I think the housing market could also use some more help through an extension of the first-time home buyer tax credit into next year to try to keep this recent stability in housing values permanent," Zandi suggested. Although according to Zandi, the recession is over. "The idea behind stimulus was to bring an end to the recession, to provide a catalyst for future growth and then to let the private sector take over, and it's done exactly that. The recession is over. It's no accident that the recession has ended when the stimulus is providing its maximum economic benefit,"he said.