
…Previous underwear model, & new US Senator, Scott Brown says: “Stimulus didn’t create one new job.” However, the city of Oakland, CA, says that the stimulus money “created 5000 new infrastructure jobs”.
How can the past Republicans, that left Americans with the largest deficits in history, decry Democrats for spending to save the economy?
Even though the conservatives keep having “hissy fits” about all the government spending, there are very few economists that agree that cutting government spending and applying massive tax cuts are the way to go at this time.
One recent article in the New York Times said “To stop government spending now would be suicide while the economic recovery is still so fragile. In today’s atmosphere, the US government is the only source available for getting money out into the market as the private investors are holding on to what they have while they are keeping an eye on the overall US business economy.” Even the Noble Prize winning economist, Paul Krugman says that there needs to be more government spending on real US infrastructure and “Green” jobs programs until the economy actually starts to outwardly show real recovery.
It just drive me bonkers when these so called “conservatives” keep saying that “it’s time to stop spending and we need massive tax cuts for small businesses for increasing more US jobs”. Pleeeeeease read your history people. “Tax cuts don’t create jobs, and neither does stopping government spending. Especially when the government is the country’s last resort for making large sums of money available.”
As a case in point, in a recent polling of small business owners, the owners were asked; “What would you do with the additional revenue if your business was able to receive an immediate major tax cut?” In fact, they were specifically asked, “Would you hire a new employee if you received a small-business tax cut?”
Every small business owner that was asked gave a resounding; “No, they would not hire another employee.”
They did say however, that they would probably spend some money on some investments in their business. And some even said that they might re-do their kitchen or bathroom at home. But they would not add any new employees.
They were very clear that from their experience, tax cuts don’t create jobs. Only increases in sales or their actual business activity creates openings for new employee hiring’s. Once they could no longer handle their business or sales increases with their current staff, then, and only then would they consider hiring a new employee.
This has always been the traditional approach by small businesses in America, and probably most everywhere else. Small businesses do not normally plan ahead like those in an R&D environment where one invests ahead to get a jump on their competitors. Small businesses use a “reactive” business approach”, not a “pro-active” approach, in regards to their new hires.
The business owners added that the government could possibly offer some financial incentives for opening up some new positions, but only if the government would take the responsibility for the salary and benefits of these new employees for some initial period of time.
So why do the Republicans and the conservatives continue to push the old “wives’ tale” that spending must stop and taxes must be cut to fix the economy?
It didn’t work with the Great Depression and it is pretty much agreed that if there had not been the TARP bail-out and Obama’s Stimulus Package, the market would still be in the dumper. In addition, the unemployment rate would probably also be above 25%. And even with all that help, we still have a long way to go. (After Ronald Reagan, two Bush’s and a Clinton that was sometimes more centrist about trade than expected, it will still take some time for things to work out.)
This weekend on the Sunday morning talk show, Meet the Press, both former Bush Treasury Secretary, Henry “Hank” Paulson and Former Fed Chairman, Alan Greenspan appeared together to discuss the current US economy. Both of these conservatives agreed that the economy was in a recovery mode and that the actual recession was “officially” over.
As expected, neither of these individuals agreed with Obama’s plan for letting the Bush “tax-cuts-for-the-rich” expire, but their opinions on that issue were not very adamant in their comments. (Basically, as with most conservatives, their DNA is totally unable to accept any concept that would once again increase taxes on wealthy Americans.)
They did however agree with the poll that was taken with the small business owners. As if on cue, they both thought that tax cuts for small business was a good idea, but they also said it takes business increases to increase job opportunities. Secretary Paulson said that with an increase in business, it would “increase the[small business owners] confidence which would support increasing job opportunities” Paulson went on to emphasized that “confidence is the key”, while Chairman Greenspan sat there nodding in agreement.
Both of these financial “experts” seemed to say that baring a catastrophic event, the economy would continue to improve. However, the increase in available financing and overall business must occur in order for the unemployment numbers to continue to decline.
Both men expected the unemployment rate to remain at 9-10% for most of this year and to start declining by the end of the year.
So what’s the anticipated recipe for future US financial success?
>>> Pass another Jobs stimulus bill that actually supports jobs to fix the country’s infrastructure.
>>> Still allow the Bush tax cuts to expire.
>>> In order to get some business accomplished in the US Senate, make the Republican Senators actually have to stand and “Filibuster” a bill, just as the filibuster was originally designed.
>>> Just as China, India and Japan have done, institute a “Buy American” program for as many American items as possible.
>>> Rework our trade agreements to make our trade, “fair trade” not “free trade”.
>>> Follow through on reforming America’s entitlement programs for removing as much of the waste and graft as possible.
>>> Cut defense spending of unnecessary “pork” programs.
>>> The Democrats must stop being “wusses” and use reconciliation for getting a modified health care bill that covers 95% of Americans, controls the insurance industry while lowering our costs over time. (I know, easier said than done.)
Will this do the job? Well, it would get us a lot closer than we have been over the past 30 years.
But I’m not holding my breath as to how many of these things will occur.
One can only hope and pray.
Copyright G.Ater 2010
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