Why Isn't Tax Policy Being Used to Reduce Unemployment?

The national unemployment rate has been stubbornly high for the last two years, generally around 10%. This is much higher than it was in the preceding years, when anything even near 6% seemed way too high.

And it is now widely being accepted as the new "normal" far too easily by those in power.

"The United States will suffer high unemployment for some time as it slowly recovers from the deep recession that ended in 2009, a former second in command at the Federal Reserve said on Wednesday.

"I see a very slow, uneven recovery. It will not be fast enough to put a dent in the painfully high unemployment rate for some time," Roger Ferguson, the Federal Reserve's vice chairman from 1999 to 2006, told Reuters after a speech in Cambridge, Massachusetts.

Ferguson's prepared remarks at a National Bureau of Economic Research event focused on the fragile state of Americans' retirement savings and the concerns it poses for policymakers.

"For too many people, financial security that lasts a lifetime is beyond their reach," said Ferguson, now chief executive at the financial services company TIAA-CREF."

With the Democrats now in charge at all levels of the federal government, their pathetic and weak response to the recent economic crisis has mainly been to increase the amount of federal welfare provided to those out of work (in the form of extended unemployment benefits), as opposed to creating real incentives for employers to hire more employees and for helping foster an economic environment where entrepreneurs start businesses and hire more people.

It's time for those in power to use tax policy to lead the way.

This would include tried and true methods of incentivizing businesses and entrepreneurs through lower business and personal tax rates, to be matched by reduced spending by the federal government.

Let's stop treating the currently unemployed as permanently unemployed, give people a real reason to hire again and get the economy moving again.