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Ralph R. Reiland

Ralph R. Reiland

The B. Kenneth Simon Professor of Free Enterprise at Robert Morris University

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Reflections

An Anti-Jobs Jobs Bill

by Ralph R. Reiland
 

"Pass this bill now," demanded President Barack Obama, referring to his American Jobs Act.

There's nothing new in it, just more government spending -- more spending for infrastructure enhancements so we won't supposedly be buried by collapsing schools and bridges.

The "rush" tactics are the same. As with ObamaCare, there's a proclaimed "crisis," followed by demands to pass legislation "now," even if no one has adequately analyzed the bill, or even if no one has read it, or even if the legislation will only make things worse, and even if we're already flat broke.

And as with earlier stimulus packages, roads are a particular priority in the American Jobs Act. You'd think we were all riding around in mud ruts. I heard a politician say last week that 40 percent of American roads need to be rebuilt -- not just fixed up with some pothole mix, but torn up and hauled away right down to the dirt and completely made brand new.

We have 4 million miles of roads in the U.S., so 40 percent is 1.6 million miles. And what's the price per mile for a new road? It depends on such things as hills, water, etc., but a generic cost model by the Department of Transportation in Florida puts the price at $1.5 million per mile for rural two-lane roads, $3 million per mile for rural four-lane roads, and $4 million per mile for urban four-lane roads.

Of course, when the politicians get really nuts, they can end up blowing $500 million per mile, as with Pittsburgh's tunnel to the North Shore. It was better when it was called North Side and a bridge was good enough and the $500 million could have been used for cancer research.

In any case, let's figure the 1.6 million miles of allegedly collapsing American roads at $3 million per mile. That's $4,800,000,000,000 -- another $4.8 trillion of red ink, deficit and debt.

Add that to the $14.7 trillion that we're already in the hole at the federal level (to be exact, $14,717,868,058,346.24 as of the minute I'm typing this sentence), and that averages out to $342,500 in federal debt for each of the 51 percent of American households that still pay federal income taxes.

But the tax burden doesn't equally average out. Federal income tax figures for 2008, for instance, updated in October 2010, show the top 10 percent of income earners receiving 46 percent of total income and paying 70 percent of total federal income taxes.

In addition to roads, Obama's new jobs program includes spending to rehab "vacant homes." Why the priority to fix up vacant houses during a major housing glut? And why borrow money from China or hike taxes in the U.S. on those who are the most likely to create real jobs in order to fund some temporary jobs in wasteful and ill-conceived make-work projects?

Obama said that "everything in this bill will be paid for." Over 10 years, he wants $41 billion more in taxes from oil and gas companies, $3 billion more from owners of corporate jets and $400 billion more from "the rich" (defined as anyone earning $200,000 or more a year, or any family earning $250,000) by limiting their itemized deductions for mortgage interest and charitable giving.

What Obama is saying is that we'll get more jobs by way of less oil and gas, less manufacturing of jets, fewer home sales, and lower levels of charitable giving.

Ralph R. Reiland is an associate professor of economics at Robert Morris University and a local restaurateur. E-mail him at rrreiland@aol.com