A proposed tax break is supposed to encourage hiring - but MoneyWatch's editors aren't sure it will work. Plus: Do we need another home buyer credit?
>> Jill: Hi, I'm Jill Slessenger assumed spelling, Editor at Large.
>> Jack: And I'm Jack Otter assumed spelling, Executive Editor.
>> Jill: In today's Reality Check the economy's improving but people are still struggling. What should the government do now?
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>> Jill: Jack, you know, we're hearing a lot about stimulus 2, what should we do, how we gonna get people to work. What is the one issue that you think is getting a lot of play in the press right now that warrants talking about?
>> Jack: This idea of giving businesses a tax break for hiring new workers. I think it sounds great but in reality I think it is a gift to those businesses that are doing well and it won't help businesses that are struggling.
>> Jill: Wait a minute we just had these horrible employment numbers last week don't we want people to give a benefit to someone who actually hires a new employee?
>> Jack: Absolutely and I feel hard hearted even saying this but --
>> Jill: You are hard hearted. I've said that for years.
>> Jack: That's true but the point is the reason businesses aren't hiring is because they're not selling anything, and so simply throwing a little extra money at them for adding to their workforce means that those few businesses that are lucky enough to be doing well right now will say, hey, thanks for the check. But the ones that are really struggling; this little bit of marginal difference isn't gonna be a big enough impact to really change things.
>> Jill: Okay, so let's talk about something that has had an impact which is this first time homebuyer's credit. By some estimates since this $8,000 credit for first time homebuyers has gone into affect something like 400,000 of the 1.4 million sales that have occurred got that benefit. Now, the first time homebuyer good news. Did we need to extend that?
>> Jack: Well, I'm gonna be hard hearted again and say no. And I'm sorry but we've just had the most massive real estate bubble anyone can remember. So to me pumping up real estate even more is probably not the thing to do. Granted it has come down but I think at this point we just let the housing market find its bottom, it's probably actually already on the rise again, and just let it proceed normally without extra money.
>> Jill: I would like to hope that they extend it and expand it so I can take advantage of it but I'm gonna have to agree with you. I don't think this credit is actually worth the cost. What I want to see is stimulus that really gets jobs created whether it's government or state jobs I think we've got to pump that money out to the states, get it in the system as quickly as possible, that's not gonna happen so unfortunately that's your reality check.
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