There are a number of steps that must be taken to contain unemployment and revive a slowing economy. This week's essay suggests a good place to start might be payroll tax cuts.
Here is the lead:
Employment in the U.S. has been in a free fall. Payroll employment has declined by 3.6 million since the start of the recession in December 2007, according to the latest report from Bureau of Labor Statistics. Firms have shed jobs every month since January 2008. Last January alone, the national payroll dropped by 598,000 jobs. The unemployment rate has risen from 4.9 percent in January 2008 to 7.6 percent in January 2009. Is it time to consider a payroll tax cut? When the goal is to contain unemployment, taxing labor does not make much sense. In 2007, IRS collections from FICA (Federal Insurance Contributions Act) taxes totaled $787.8 billion. Firms and households share the burden of these payroll taxes.
Now, read the rest.