OK -- You read my headline: "Payroll Tax Cut Won't Cost s Anything"..and you clicked the link to see how this could be so. Amazing, you say? Incredible? Unbelievable? It's a cut in the payroll tax, and one that must be made up, lest we increase future deficits in entitlements programs?
How could this be possible?
It's really quite simple. The payroll tax cut won't add a single job. There isn't any business that will hire a worker just because the payroll tax cut will be extended.
There is only one thing that will cause new hiring -- and that's greater demand for goods and services. Enough increased demand that businesses will need to hire new employees to service the additional demand for products and services. So, if the Administration isn't proposing anything that will actually generate new, increased demand in the economy, then the numbers being floated for the payroll tax are pure fiction. We had 0% growth in the job sector last month -- no new hires. Unless the Administration is going to do something about that, then any bold projections about the billions that will go towards a new payroll tax are pure hype.
The problem isn't just that this isn't the Administration's first choice -- it's that it's utterly ineffectual. If there was some big new stimulus, then there might be new demand. If there was increased demand, the payroll tax cut extension might be meaningful. Unfortunately, we do not get to pass Go.
If you're worried about budget deficits, or threats to the solvency of entitlement programs, this is an innocuous proposal, because it won't actually do anything to increase deficits...not without any real impetus for job creation. If, however, you believe that the path to lowering the deficits is to boost the economy to generate new revenue, then this will be worse than useless, because it represents lost opportunities, pain for out-of-work Americans, and further spending to support those who cannot support themselves.
That's the choice, as I see it.