Deer Hunters Net

Ready for leisure suits, gold chains, Angel’s Flight skin-tight polyester pants, and the Village People? If you liked the economic policies of the Carter presidency, you’ll love Barack Obama’s new jobs bill, CNN reported yesterday:

The ghost of Jimmy Carter’s one-term presidency is hovering over President Obama as the Democrats try to pass a jobs bill in time for this year’s elections. So why is the centerpiece of the measure — a tax break for companies that make new hires — a play straight from Carter’s economic policy circa 1977? …
Critics of Carter’s plan — and Congress’ now — say that the problem with any jobs credit is the potential for waste. It’s estimated that of the companies that claimed the tax credit under Carter’s plan, two-thirds would have hired those employees regardless of the tax break.
“It’s a windfall for companies that want to expand anyway,” says Rea Hederman, a senior policy analyst at the Heritage Foundation. Should the bill pass, Hederman says the big beneficiaries of the tax credit this time around would be companies in the big-growth areas of health care and education.
Another problem with the 1977-78 effort is that many companies, especially small businesses, didn’t even know about the tax credit. A survey by the National Federation of Independent Business found that only 43% of their members knew of the law in January 1978.
Meanwhile bigger companies were, and still are, better-equipped to take advantage of the tax breaks because their armies of accountants can keep up with the complex changes. (Never mind that the law behind the 1970s tax credit was called the Tax Reduction and Simplification Act.)

Supporters of Carter’s bill point out that the unemployment rate dropped two points over the following two years from a peak of 7.8% when Carter took office. However, as CNN notes, the economy in 1976 and 1977 had begun a rather robust recovery. Real GDP increased 5% each year, a level which would have created jobs regardless of the tax policy. Since that growth started well before Carter took office, it’s more reasonably attributable to the normal economic cycle than to Carter’s policies. In fact, the Whip Inflation Now buttons have a better case for claiming credit, and that’s not saying much.