Politics: Two Schools Of Thought

I figured I’d start prefacing my post titles so that people who don’t care about my political ramblings can just move on.  (much in the same way most people do about the rest  of my ramblings.

In economic politics, there are two schools of thought.  Those who believe that tax cuts are the way to stimulate the economy, and those who believe that spending is the way to stimulate the economy.

I’m going to explain to you, as a small business owner, why the republicans CONTINUE to have their collective heads up their collective asses.

Scenario #1:  I am a small business owner (I am) who is barely making it by.  My republican lawmaker offers me a $10,000/year tax credit for each person I hire and keep working.

How many people do I hire?  None.  Because as a financially strapped small-business owner I need two things to be able to hire people and keep them employed.

1> Income.  In order to hire someone I have to have the work to put them to work.  If I have the work to keep someone busy, I’m going to hire them no matter what the government does. If I dont have the work to support it I’m not going to spend $50,000 (arbitrary number) to hire someone.  (No matter what some avid shoppers, you can’t save money by spending money unneccessarily.)

2> Money.  In the (very real) scenario above, money is tight.  I as a small business owner don’t have the money to hire someone, if the republicans offer $1,000, or $10,000 or $100,000 in tax breaks it doesnt help the fact that I don’t have the money to make the hire in the first place.

Scenario #2: I am a small business owner (I still am) who is barely making it by.  My democratic lawmaker friends pass a bill authorizing infrastructure upgrades around the country.

I (still a small business owner) bid on and receive a project grant for possibily millions of dollars for thousands of man-hours of labor.  I hire a few project managers, several architects, maybe two dozen entry level peple for labor, and put them to work.  Thereby putting thousands of dollars back into the local economies.

Also, and on a slightly unrelated tack:

If you (as a government) give a tax cut to someone making a million dollars a year, it increases his net-worth.  They don’t change their spending patterns because of it, they don’t take the money down to the local mall and spend it.  They sit on it.

If you (again, as a government) create a thousand $50,000/year jobs.  You pump $35,000,000-$40,000,000 *DIRECTLY* into the economy where those jobs are created.   DIRECTLY.

This works.  this has worked.  This will work again.  But republicans are too tied up in their stupid idology to realize that over the last eight years their buddy, Bush, has managed to prove beyond a shadow of a doubt something democrats have been trying to prove for years.

Not only does “trickle-down” economics not work, it has exactly the opposite effect.  Trickle-down economics only truly affect the companies that are already making money.  The use the tax breaks along with well-timed layoffs to pad their bottom lines and make their stock-holders happy thereby raising stock prices and earning themselves fat bonuses.

Hasn’t anyone known that layoffs always happen right before quarterly earnins reports are put out?  This is because while you and I view layoffs as awful, stockholders only see these people, these families, as dollar signs.

Now it’s just me – but you might try giving the democrats a shot at this.  It’s the right move, and it sure beats the last 8 years of going 100% in the wrong direction..