I heard that in a sound bite from Bush’s speech in California today.
All I want to know is how?
Does he really think that none of the rich will take their tax cut and run? That all of that money will be poured back into the economy?
Anyone want to buy a bridge?
oops…make that 1,000,000 jobs.
my bad
Yeah, that extra 3 orders makes a big difference.
Whenever Bush talks about the economy I keep hearing the phrase '“trickle down theory” in my head.
It didn’t work before, why should it now?
As I pointed out in another thread, when Reagan tried that same approach in the '80s, the unemployment rate actually went up. I wish George W. luck.
And as someone else pointed out in the same thread, the changes in unemployment were due largely to the Fed’s monetary policy, which intentionally induced a minor recession to combat the runaway inflation in the 70’s.
I’m baffled by people that say the economy was bad during Reagan’s tenure. I don’t think Reagan deserves as much credit as Republicans give him for the robust economy in the 80’s, but that period through the mid-90’s were one of the greatest eras of economic expansion in history.
First, the tax cut isn’t just for the rich. Everyone gets the tax cut.
Second, some of the money freed up from the tax cuts will go into savings. In fact, some of it will probably go into savings vehicles, like stocks or real estate or being put into banks, all of which would help shore up different sectors of the economy. The only thing that would really hurt the Bush administration’s proposal would be if all the people that got tax cuts – rich and poor alike – took their tax cuts and stuffed them under a mattress. Any other type of savings vehicle, or any type of spending, is expected to help the economy.
Third, if you’re really interested in how the Bush administration thinks the tax cut will help the economy, check this out. [Warning: It’s a .pdf file]. It’s a paper put out by the Council of Economic Advisors, and it’s also the source of the numbers you heard.
I own a small business (my wife and I started 11 years ago, with 6 employees) and we employ 65 employees. On a whim (or any asinine liberal tax/law proposal that would be approved), we could just close our doors and have 67 people unemployed. Multiply that by hundreds of thousands other businesses like ours, and you can see how the trickle down theory works in a negative manner. Although I am not contemplating on shutting my doors anytime soon, there are many other businesses that may be DEPENDING on the tax cut or closing for good.
There are many larger businesses out there that might not need the tax cut, but there is about a tenfold of small businesses that employ the majority of Americans out there that live or die from one contract/project/customer to another. Many people fail to see that. I think American Airlines employees are starting to understand though, and they are a large company with a unionized workers. Even larger companies are not safe nowadays.
I support a tax-cut not so I can get rich (or richer as some people here believe), but to expand our business and relocate to a larger building (and in need of construction, which creates or maintains jobs outside of our business). The trickle down theory does work.
Even if he gets his tax cut and if it does create 1,000,000 jobs, that will just about offset the approximately 1,000,000 federal employees he wants to fire this fall.
He wins; the country loses, no matter what.
Kinda depends if you are the trickler or the tricklee.
First of all… cite? I’d heard of layoffs, but I hadn’t heard numbers in the neighborhood of 1M.
Secondly, that wouldn’t amount to a “loss” from an unemployment rate angle, simply a break-even.
And thirdly, it would depend on what happens to the money that’s no longer going to federal employees. If that is simply money not spent, then it would find its way back into the economy, and create even more jobs. If it gets wasted on more government programs, of course, then it does the economy no good.
Jeff
How does money not spent make its way back into the economy? Doesn’t the money need to go to someone for it to be spent on the economy?
$550,000,000,000/1,000,000 jobs = $550,000/job.
That seems a bit pricey. Wouldn’t we get more jobs per dollar with a big public works type infrastructure project ?
Shit, give me $550,000 and I won’t need a job!
Of course, it might undermine my self-esteem and corrupt my character. Its a risk I’m willing to take for my country.
If there is a business in the US that is depending on a tax cut for the general population as to whether it stays open or closes, then that business is so marginal that it might as well shut down now.
I read something yesterday and can’t find the cite, but the US economy has steadily expanded and added jobs at a normal average rate of about 1.5 million jobs every two years. Wish I had that cite.
anyhoo, the point is that the economy should be adding a certain number of jobs anyway over the next two years, and that the tax cuts will erroneously take the credit for that creation.
Not personal politics, but the sudden explosion of the deficit (cutting taxes, decreased tax revenues owing to economic slowdown, cost of war, increase government spending) is going to be real painful down the road.
Fiscal irresponsibility.
My wife’s cousin bought a small business a couple of years ago, after he got laid off. He hasn’t been able to take any salary out, but he’s in there trying. I think there’s a chance he’ll succeed, which would be nice for him and for his employees.
BTW businesses make decisions based on projected profits after tax. So, lower tax rates encourage more new businesses to start up and more business expansion, because their projected after-tax profit is higher.
This tax cut is spread out over a ten year period.
Employees need tools, equipment, supplies, training, a building or location to work at, Workers Comp, FICA, UI, ETT, etc., etc., etc. paid for so they can have a job. Give it away? This country was founded on hard work, not Welfare! (That came later…)
I don’t see how you can say Reagan’s supply-side economics plan had nothing to do with unemployment levels, and in the same breath claim that Bush’s supply-side economics plan will have everything to do with it. So “trickle-down” doesn’t help unemployment when there is inflation (or rather it takes 10-15 years to have effect), but now it is going to help, and in one year, no less, because it’s a completely different situation. Yeah, right.:rolleyes:
How much of a failure does an economic theory have to be before it is actually discarded? Or do you just keep saying “No, it’ll work this time - it’s different”.
So if there are going to be 1,000,000,000 new jobs, and there are only ~300,000,000 Americans, does this mean I’m now going to have to work at least three new jobs???
And I thought I didn’t have enough free time now…
Screw the child labor laws, I say… 
Many mom and pop businesses are in that predicament now, and there are too many to count. Each one employs a few other people. The numbers in the unemployment line will jump up pretty quick if they took your advice. You probably know quite a few people who work for a small business (~100 employees or less). Do you think that they would like your idea?