Amid the debate over whether the United States is in a recovery or a recession, the nonpartisan Congressional Budget Office has made a grim prediction about unemployment. The CBO said unemployment is unlikely to drop to a manageable rate of 5 percent before the end of 2014. That’s more than four years away!
Wherever you stand on the recession debate, the indicator that probably most Americans consider the clearest gauge of how the economy is doing is unemployment. Official unemployment is 9.5 percent. Millions more Americans have given up the job hunt in frustration, and millions can get only part-time employment.
With so many already hurting badly in this economy, it is alarming that it could be nearly half a decade before unemployment falls to a reasonable level.
Interestingly, the CBO said retaining at least some existing tax relief would shave 1 percentage point off the unemployment rate, though it said that would come at the cost of more debt. But that doesn’t have to be the case. Congress can keep lower taxes and reduce debt if it will slash wasteful, unconstitutional spending.
Tax relief can spur job creation and ultimately boost government revenue. It certainly should not be blamed for the debt problems brought on by reckless spending.