With the worst jobs crisis since the Great Depression worsening, you might expect emergency action out of Washington. But the biggest upcoming debate there is whether to extend the Bush tax cuts for the richest 2 percent, or for everyone, or for no one...
We need a response proportional to the crisis. Obama, Pelosi, and Reed should summon Congress back to Washington for action on the jobs emergency.
First item on the agenda: establishing a federal bank that will provide states and locales zero-interest loans, to be repaid when their unemployment rates drop to 5 percent or below.
Second item: eliminating payroll taxes on the first $20,000 of all incomes and make up the difference by subjecting all income above $250,000 to the payroll tax. (Remember, the wealthy save most of their after-tax income, lower-income Americans spend it.)
Third item: recreating the WPA to hire Americans directly. The Works Progress Administration put Americans back to work during the Depression rebuilding the nation’s infrastructure.
---Robert Reich, 8/9