Obama Takes a Page Out of Jimmy Carter's Book

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?

Then, as now, the economy looked anemic and unemployment was high: 7.8% when Carter entered office, compared with 9.7% now. So just eleven days after his inauguration, the president proposed giving companies a temporary tax break if they hired new employees, calling it the New Jobs Tax Credit. The law went into effect for 1977 and 1978, over which time the unemployment rate fell 2%.

So, in theory, this tax break seems like a great idea. More money for companies that hire more employees, what could go wrong? Well one problem is that when this tax credit was initiated the first time, less than half of small businesses even knew about the tax credit. Many also argue it will cost more than it is worth.

A major flaw is that the bill "includes a requirement that in order to qualify for the tax break, an employer has to hire someone who has been out of work for at least 60 days". This seems unneccesary, employers should hire based on skill and what they need.
Well, all we can say is that hopefully, if this tax credit goes through, that it will be a success and enough people can get work to keep the economy recovering.