As Illinois Leads Nation in Jobs Lost, Dems Learn All the Wrong Lessons

October 13, 2011

IL Lost the Most Jobs in 2011 After Dems Passed Job-Destroying Tax Hikes in Jan., Now Dems Want to Take Their IL Plan National

Over the last month, President Obama has responded to his declining approval ratings by proposing more of the same failed policies from the last two years. In the last month alone, Democrats have proposed nearly $2 trillion in new tax hikes.
However, we already know that these tax hikes will hurt job creation. Just look at President Obama’s home state of Illinois, where months after his fellow Democrats passed record tax increases in January, the state now leads the nation in jobs lost this year.
Even some prominent Democrat economists have documented that tax increases can be highly damaging to economic growth—not to mention President Obama’s own admission that it’s a bad idea to raise taxes during a bad economy.

BACKGROUND

Over the last month, President Obama has responded to his declining approval ratings by proposing more of the same failed policies from the last two years. In the last month alone, Democrats have proposed nearly $2 trillion in new tax hikes:

“OBAMA VOWS VETO IF DEFICIT PLAN HAS NO TAX INCREASES”: (Helene Cooper, “Obama Vows Veto if Deficit Plan Has No Tax Increases,” The New York Times, 9/19/2011)

AND PROPOSES $1.5 TRILLION IN NEW TAX HIKES. (Helene Cooper, “Obama Vows Veto if Deficit Plan Has No Tax Increases,” The New York Times, 9/19/2011)

RIGHT AFTER OBAMA OFFERED $467 BILLION IN TAX INCREASES TO PAY FOR STIMULUS 2.0: “The Obama administration is asking Congress to raise taxes by $467 billion over 10 years to pay for the President’s one-year $447 billion stimulus, which he announced during a speech Thursday before a joint session of Congress.” (Neil Munro, “Obama Asks Congress for $467-Billion Tax Increase to Fund Jobs Plan,” The Daily Caller, 9/12/2011)

However, we already know that these tax hikes will hurt job creation. Just look at President Obama’s home state of Illinois, where months after his fellow Democrats passed record tax increases in January, the state now leads the nation in jobs lost this year:

“ILLINOIS LAWMAKERS PASS 66 PERCENT INCOME TAX INCREASE” IN EARLY JAN. 2011: “Democrats in the Illinois Legislature on Wednesday approved a 66 percent income-tax increase in a desperate and politically risky effort to end the state’s crippling budget crisis.” (“Illinois Lawmakers Pass 66 Percent Income Tax Increase,” Associated Press, 1/12/2011)

DEMOCRAT TAX PLAN INCREASED IL BUSINESS TAXES BY 45%: (Douglas Belkin, Lauren Etter and Ilan Brat, “Illinois Braces for Tax Increases,” The Wall Street Journal, 1/13/2011)

105,423 JOBS LOST IN IL BETWEEN JAN. AND AUG. 2011, THE MOST LOST BY ANY STATE SO FAR THIS YEAR: (“Local Area Unemployment Statistics,” Bureau of Labor Statistics, 9/16/2011)

IL JOB GROWTH HAD BEEN SLOWLY CLIMBING UNTIL JAN. 2011: (“Local Area Unemployment Statistics,” Bureau of Labor Statistics, 9/16/2011)

(Illinois 2010-2011,”Local Area Unemployment Statistics,” Bureau of Labor Statistics, accessed 10/12/2011)

Even some prominent Democrat economists have documented that tax increases can be highly damaging to economic growth—not to mention President Obama’s own admission that it’s a bad idea to raise taxes during a bad economy:

FMR WHITE HOUSE ECONOMIST CHRISTINA ROMER: TAX INCREASES HAVE A “HIGHLY SIGNIFICANT NEGATIVE IMPACT”: “[T]ax increases appear to have a very large, sustained, and highly significant negative impact on output. Since most of our exogenous tax changes are in fact reductions, the more intuitive way to express this result is that tax cuts have very large and persistent positive output effects… Our baseline specification implies that anexogenous tax increase of one percent of GDP lowers real GDP by almost three percent.” (Christina D. Romer and David H. Romer, “The Macroeconomic Effects of Tax Changes: Estimates Based on a New Measure of Fiscal Shocks,” American Economic Review, June 2010)

DEMOCRAT ECONOMIST ZANDI SAID ECONOMY WAS “TOO FRAGILE” FOR TAX INCREASES LAST JULY AND THINGS HAVEN’T GOTTEN MUCH BETTER: “I would not allow those tax increases to take hold on January 1st…I think economy’s still too fragile for that.”(Remarks from Mark Zandi, PBS News Hour, 7/30/2010)

2009: OBAMA CONCEDED THAT “THE LAST THING YOU WANT TO DO IS RAISE TAXES IN THE MIDDLE OF A RECESSSION BECAUSE THAT WOULD JUST…PUT BUSINESS FURTHER IN A HOLE”: “Obama agreed with Ferguson’s premise – raising taxes in a recession is a bad idea. ‘First of all, he’s right. Normally, you don’t raise taxes in a recession, which is why we haven’t and why we’ve instead cut taxes. So I guess what I’d say to Scott is – his economics are right. You don’t raise taxes in a recession. We haven’t raised taxes in a recession.’ …

‘So he’s absolutely right, the last thing you want to do is raise taxes in the middle of a recession because that would just suck up – take more demand out of the economy and put business further in a hole.'” (Stephen F. Hayes, “Obama vs. Obama,” The Weekly Standard, 7/11/2011)

BUT RECESSION FEARS ARE NOW RISING AGAIN:

ECONOMIC CYCLE RESEARCH INSTITUTE: DESPITE STIMULUS 1.0, AMERICAN ECONOMY POISED TO ENTER RECESSION 2.0: “But at least one organization with an exceptionally good track record says another recession may already be here. That is the Economic Cycle Research Institute, a private forecasting firm based in Manhattan. …

“Relying on a series of proprietary indexes, the institute correctly predicted the beginning and the end of the last recession. Over the last 15 years, it has gotten all of its recession calls right, while issuing no false alarms.

“That’s why it’s worth paying attention to its current forecast. It’s chilling: as bad as the economy has been, it’s about to get worse.” (Jeff Sommer, “An Ugly Forecast That’s Been Right Before,” The New York Times, 10/8/2011)

DEMOCRAT ECONOMIST MARK ZANDI: 40% RECESSION RISK OVER NEXT YEAR. (Tweet from Catherine Rampell, The New York Times, 10/11/2011)

ECONOMIST NOURIEL ROUBINI: “DOUBLE-DIP RECESSION A FOREGONE CONCLUSION”:(Deepanshu Bagchee, “Double-Dip Recession a Foregone Conclusion: Roubini,” CNBC, 10/11/2011)

GOLDMAN SACHS ECONOMISTS: ECONOMY FACES 40% CHANCE OF DOUBLE-DIP RECESSION, MID-9% UNEMPLOYMENT TO PERSIST THROUGH 2012: “Jan Hatzius, Goldman’s chief US economist, pegged recession chances at 40 percent and said the jobless rate is likely to surge to the mid-9 percent range in 2012.” (Jeff Cox, “Recession Chance 40% in 2012, Jobless Rate to 9.5%: Goldman,” CNBC, 10/4/2011)

FED CHAIRMAN BEN BERNANKE: ECONOMIC RECOVERY “CLOSE TO FALTERING”: (Pedro da Costa and Mark Felsenthal, “U.S. ‘Close to Faltering,’ Fed Ready to Act: Bernanke,” Reuters, 10/5/2011)