More business tax cuts, our President thinks this is just the trick to get the economy moving!
Businesses, on the other hand, aren’t spending and aren’t hiring because of one simple reason: a lack of demand.
The output gap’s likely over $1 trillion, and there’s a huge oversupply of everything, from cars to strip malls to houses.
The only way that gets reduced is for government to start spending, first and foremost on hiring people. People with jobs are people who spend money, pay taxes, and stoke demand.
Tax cuts are the least effective means of economic stimulus, because they don’t do much more than move purchases forward.
Once they’ve expired, or once they’re built into the future reckoning of corporate finance types, things will start to go south again.
There are hundreds of billions available to the President via TARP and the Congress need not even be consulted: He could start pumping up demand tomorrow by hiring a few million unemployed workers to do things like painting roofs white, building roads, installing energy efficient lightbulbs in schools, fixing leaky pipes, and making mortgage payments.
Instead, the sense is that the Administration is flailing around with peanuts proposals that have no chance of being enacted by Congress, while the very party that destroyed this country’s economy is looking like getting back into power!!!
Gorilla says: “Time for our economic geniuses to take Econ 101 again!”
