President Obama managed to get a 2-month extension of the payroll tax cut, and no doubt - after the usual wrangling with Congress - it will get extended again.

Doing so would be a mistake.

The payroll tax cut is a cut in the employee's share of the Social Security tax from 6.2% to 4.2%. The problem is that the money is going to people who already have jobs, and the bigger your income - up to the limit of $106,800 - the more you get. Wouldn't it be better to take that money and spend it on something that puts the unemployed back to work?

The primary cause of unemployment is the collapse of the housing industry. We have too many houses, and nothing for all those construction workers to do. Let's put them to work on public projects like building highways, bridges, sewer systems and schools and finance it with a tax increase of some kind. A small increase in the income tax, maybe, or a carbon tax.

The public work projects need to be closely monitored so the money doesn't get stolen; that seems to happen a lot these days. There also needs to be a provision that all projects go to the low bidder. We want them to be done at the lowest cost possible. There can be no "prevailing wage" provisions or any preference given to organized labor. We want this money go as far as possible - to accomplish the most and employ the most people. This approach will also make the program much more acceptable to Republicans.

The other problem with the payroll tax cut is that it has to be paid for. It will cost $33 billion over 10 years. The plan is to pay for it from a fee on mortgages sold to housing finance giants Fannie Mae and Freddie Mac, according to this story in the Los Angeles Times. Ultimately, it comes out of the pockets of home buyers, and will hurt the same housing industry that put us into this recession.