Republicans are already blasting President Obama’s jobs speech before he’s even given it, even though part of his plan is rumored to be extending tax cuts to spur growth, which tends to be the GOP talking point on fixing the economy.
Senate Minority Leader Mitch McConnell says that it’s just going to be more of the same failed policies.
But what are those same failed policies, exactly?
Ending off-shore drilling? Nope, that’s back to near pre-ban levels.
EPA’s regulations smothering business? Nope, the EPA’s new rule on smog has been pushed for two more years down the road.
Raising taxes on the rich? Nope, Obama extended the Bush-era tax cuts for everyone another two years as well as cut payroll taxes for all workers.
How about the financial regulation and health care laws? Most of those rules haven’t even gone into affect yet. Of course, the argument about that is that’s causing uncertainty in the markets. But there isn’t much data showing that’s the primary reason why companies aren’t hiring. Rather it’s plummeting consumer demand due to massive unemployment and extreme losses in overall wealth due to the housing market meltdown.
So it must be the stimulus, right? The dreaded stimulus that apparently not only did nothing but made things worse (even though job creation went up right after the stimulus and continued so – albeit not amazingly – until this past month or so, which coincidentally aligns with the end of most of the stimulus).
Is that the failed policy then that we can’t dream of repeating? Certainly it’s not the third of the package that was all tax cuts, since tax cuts are always a good idea (except when they’re not, right, Republicans?). And if that was what caused the spike in jobs, then shouldn’t the Republicans be pointing to that as evidence of good policy rather than blasting it?
At what point are taxes so low that there’s zero rebuttal about whether or not they’re working to stimulate the economy when job growth continues at an anemic pace? Because, honestly, we’re pretty much there now. The tax environment is as friendly as its been in recent history for business. Last year, GE not only didn’t pay any taxes on their $14 billion in profits, they got $3.2 billion back from the federal government. (Read: from us taxpayers.)
Why then haven’t they hired thousands of American workers?
Well, according to their own report, GE is planning to hire 8,000 workers in the next 18 months. Even though that’s a year and a half away, let’s just assume for argument’s sake that their tax refund from 2011 is what caused this growth. That would mean that it cost taxpayers $475,000 per job. A bit pricey and unsustainable considering we need over 14 million jobs to get back to where we were before the 2007/2008 calamity.
Even more troubling is that report comes at the same time as another report that’s not nearly as optimistic: it says that GE is moving their X-ray business from Wisconsin to China, with plans to invest $2 billion dollars overseas. They claim that this won’t result in job cuts, which may be true, but it’s hard to see much future American growth if they’re building new facilities in and moving business to China. Moving industries out of America rarely creates jobs in America.
And now I’ll let Andrew Sullivan finish this off with some nuggets of worthwhile factual information, his emphasis:
One third of the hated stimulus was tax cuts. Obama is now proposing an extension of the payroll tax cut. Tax revenues are at their lowest in fifty years and tax rates are lower than under Reagan. Obama even agreed to extend the Bush tax cuts for two more years. If tax cuts are the solution, why aren’t we booming?
Anyone?
