Nevada Union Leader on Funding the ERA
Dec. 4, 2006 (EIRNS)Regarding the proposed Economic Recovery Act of 2006 (ERA), I believe that in the Congress, particularly the House; there are many difficulties that must be overcome before the ERA or any substantial portions of it could be passed.
One of the many substantive platforms that Democrats campaigned on during the recent cycle was the economy. We have the highest national debt ever, and an ever increasing trade deficit with foreign interests (primarily the far east). I fully understand that a major portion of the purpose of the ERA is to boost production of infrastructure related items by retooling portions of the shrinking American auto industry. With the economy platform, it may be difficult to get significant spending bills introduced. If I recall correctly the proposal was $300 billion in Federal spending to kick start the program. I believe that there is a way to address this problem with legislators in the House (where it obviously must be introduced).
Federal spending of this nature creates jobs. Most studies indicate that this type of spending creates approximately 47,000 jobs per billion in spending. If you look at the math (not Presidential math) below you will see that $300 billion costs significantly less.
$300 billion x 47,000 Jobs = 14.1 million jobs
If you assume that the average compensation for each job is $40,000 per year;
14.1 million jobs x $40,000 = $564 billion in wages per year;
If you assume that each wage earner is paying 15% in Federal income taxes;
$564 billion x 15% = $84,600,000,000 in Federal taxes paid
Therefore $300 billion actually costs $215.4 billion.
The one thing that this doesn't take into account is the effect on individual State economies. Each State has its own tax structure that must be considered to fully understand the impact of the ERA.
If you assume an average of 10% in State taxes paid, this would create an additional $56.4 billion in State revenue, which would potentially spur additional infrastructure spending in the states where the Federal spending is occurring.
Many economists are forecasting that 2007 is going to be a poor year for the U.S. economy, considering the massive slowdowns in new home construction starts and further plans for exportation of heavy industrial-type manufacturing jobs overseas. We are at the brink of a dangerous period of time here in America, and it is up to our Government to protect us and provide opportunities for us in these types of times. Lets just hope that this crisis is not handled like many other recent crises have been.