Following a meeting with his White House economic team, President Obama gave an address on the economy yesterday. Here's a short summary from MarketWatch:
Congress should act quickly to pass a jobs bill as “too many” Americans are continuing to look for work, President Barack Obama said Monday. “Holding this bill hostage is directly detrimental to our economic growth,” Obama said at the White House about the bill, which expands credit to businesses and cuts certain taxes. Obama added that his economic team is looking at measures including extending middle-class tax cuts and redoubling investments in clean energy as ways of spurring growth and hiring.
Obama's also talked about the jobs bill ten days ago. The bill in question is the Small Business Jobs And Credit Act, which has passed the House, but was blocked in the Senate by Republicans, just as Obama said. Usually when Obama talks about GOP obstruction, it's a partisan tactic that means nothing more than the GOP disagrees with the President. That is not the case this time. I can find no legitimate reason for the Republicans to oppose this bill. The $30 billion in loans to small businesses will be paid for, by small businesses repaying the loans. There are tax cuts for businesses included in the jobs bill. The last I heard, the GOP was supposed to favor tax cuts as a way to stimulate business and the economy (and it's good to finally hear Democrats agree, even though it flies directly in the face of the Dems rhetoric over the last decade).
Senate Minority Leader Mitch McConnell complained that the Democrats were not allowing Republicans to put forth amendments to the bill. The only problem there is, it's not true. Republican amendments have been put forth, and a few were accepted, as you can see at the previous link. Other Republicans argued that this was just more spending in the Dems avalanche of spending. While I agree with the GOP about the irresponsibility of Obama's avalanche of deficit spending, what part of "paid for" don't they understand ? The GOP's objections look like little more than election year stalling, putting the people second to their dreams of victory in the fall. This is a bill the GOP would normally endorse. A pox on them.
If I have any criticism of Obama and the Democrats here, it would be…what took you so long ? Small business creates 60-70% of the jobs in this country. Meaningful assistance like this should have been offered much sooner.
I'm also wondering how the Democrats are going to run against Bush this fall when, inch by inch, they continue to endorse his economic policies, particularly regarding tax cuts. There were tax cuts in Obama's stimulus package. There were tax cuts in a jobs bill the Democrats passed earlier this year, Obama wants to extend the Bush tax cuts for the middle class, and now the Dems want more tax cuts for business. The Democrats are gradually destroying their own rhetoric about tax cuts not helping the economy. We always knew that was phony baloney. These actions of the Democrats are a de facto admission that they've been full of it all along.
The last remaining bastion of phony Dem tax rhetoric involves the so-called "tax cuts for the rich." The President and a majority of the Democrats in Congress still adhere to the notion of "soak the rich," and they still pretend that won't harm the economy. They are still wrong, and even the liberal New York Times is beginning to point it out, albeit unintentionally. In an article called 'Wealthy Reduce Buying In A Blow To The Recovery,' the Times notes the following:
Especially at this stage of a recovery, businesses and economists want to see people of all incomes spending more, because the demand for goods and services would in turn encourage companies to hire workers. The American consumer accounts for an estimated 60 percent of the country’s economic activity.
But the Top 5 percent in income earners — those households earning $210,000 or more — account for about one-third of consumer outlays, including spending on goods and services, interest payments on consumer debt and cash gifts, according to an analysis of Federal Reserve data by Moody’s Analytics. That means the purchasing decisions of the rich have an outsize effect on economic data.
When you tax more of anything, you get less of it. The class warfare strategy of the Democrats, who have big tax hikes in mind for the wealthy starting in 2011, will harm the economy. If they increase taxes on the wealthy, it will have a large negative effect on consumer spending. The wealthy will spend and invest less. There are no two ways about it, and when you hear the Dems say anything different, they are lying. While 60-70% of our jobs come from small business, 30-40% of them do not. We should be creating conditions for ALL companies to be hiring right now, not just the ones who have favored status within the Democratic party. Plus, lots of those small businesses the Dems claim to favor will be hit by the proposed tax hikes in 2011.
Now is not the time to raise anyone's taxes, even on the wealthy. It's not because we advocate for the rich. Increasing taxes on the rich doesn't really hurt the rich. They're still doing fine. The harm from the "soak the rich" strategy comes from the large negative consumer spending ripple effect caused by those tax increases. That ripple effect crashes downward, harming the non-rich, the working folks. They are the ones who lose their jobs, not the wealthy. I don't know why anyone would want to do that right now, or ever, for that matter.
