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Saturday, February 7, 2009

Is it Even About the Economy Anymore?

With the stimulus bill close to passing, I honestly wonder if it is even about the economy anymore. They were able to shave off over $80 Billion just by trimming some of the "pork". I don't understand why people think this bill can be good for the economy when the average tax payer knows he/she will just have to pay for it tomorrow. Lets face it, some of the stuff in the bill is totally unrelated to the economy that it makes me sick! I think they need a serious revision (not that we'll get it) and spend the money where we need to.

It is proven stimulus packages do work, but they are short term! In the long run this will not help employment. Roads and bridges can only be built so many times etc... Why not tax cuts for small businesses?; the additional profit can go toward keeping an employee or two. Why not a sales tax holiday?; say 1% on all goods(excluding food/medicine etc...), in NY we pay 8% on all goods (4% on clothing, 0% on food/medicine etc...), an additional 7% in consumers pockets can go toward a lot more purchasing! Why not a capital gains tax holiday?; less tax=more risk=more investing=higher market, that would restore confidence if even non-investors heard good news about the "market". There are so many other ways to get a longer term stimulus! Personally I think we would get out of this recession a lot faster just by restoring confidence!

If you study the chart from the great depression you will see that the economy tried pulling itself out 3 times, with 3 major stimuli. However it took World War 2 to get us completely out of the GD. No I am not for another world war, BUT when people say tax-cuts don't work... I just ask them to look at the Bush administrations employment growth. It was not the fastest growing job creation period, but it was the longest job creation period ever...

In a simple syllogism:

If cutting taxes allows a business to become more profitable
And becoming more profitable allows a business to keep/create jobs
Then cutting taxes allows a business to keep/create jobs

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