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View Diary: Eight False Things The Public "Knows" Prior To Election Day (25 comments)

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  •  They still won't hire (0+ / 0-)

    5. Businesses will hire if they get tax cuts.
    Reality: A business hires the right number of employees to meet demand. Having extra cash does not cause a business to hire, but a business that has a demand for what it does will find the money to hire.

    even after they are no longer being productive enough to maintain profitability.

    Revised data shows that the slowdown in worker productivity during the second quarter was larger than expected, which could put more pressure on businesses to increase their profitability in the second half of 2010.

    Business productivity for non-farm businesses was revised sharply downward to 1.8% in the second quarter on Thursday, compared to the 0.9% decline originally reported. It marks the first quarterly decline after five straight quarters of rapid productivity growth.

    "We don't expect productivity to keep declining, but it's clear that it has become much more difficult for employers to extract ever more output from their existing workforces," says Nigel Gault, chief U.S. economist for IHS Global Insight.

    Evidence of Investment

    To offset the decline in productivity and maintain profits, most experts say businesses will likely have to invest in equipment to improve worker productivity, hire more workers, or work their current workforces even harder.

    4.) The stimulus didn't work.
    Reality: The stimulus worked, but was not enough.  In fact, according to the Congressional Budget  Office, the stimulus raised employment by between 1.4 million and 3.3 million jobs.

    The stimulus is likely to reach $1 trillion after all is said and done:

    "The stimulus did what it was supposed to do," says Mark Zandi, the chief economist for Moody's and a former adviser to John McCain. "It ended the Great Recession and it jump-started a recovery."

    Republican critics have blasted the Recovery Act as a failure because it did not hold unemployment below eight percent, as the president's economic advisers had promised. And liberal economists accused Obama of failing to fight hard enough to enact a bigger stimulus that would have saved more jobs. But since the original stimulus squeaked through, the president has won a series of stand-alone measures — including three extensions of unemployment benefits, the Cash for Clunkers program, a second round of aid for states and a package of loans and tax cuts for small businesses — that have infused another $170 billion into the economy. The Recovery Act itself, meanwhile, has grown from $787 billion to $814 billion, thanks to provisions that were smartly pegged to metrics like unemployment.

    In fact, should Obama secure passage of two new programs he has proposed — $50 billion in infrastructure spending and $200 billion in tax breaks for investments in new equipment — he will have surpassed the $1 trillion stimulus that many liberal economists believed from the beginning was necessary. "

    •  what i got out of this comment: (2+ / 0-)
      Recommended by:
      Angie in WA State, sullivanst

      "To offset the decline in productivity and maintain profits, most experts say businesses will likely have to invest in equipment to improve worker productivity, hire more workers,  or work their current workforces even harder."

      the investment in equipment = jobs in equipment-producing and

      hiring more workers = employed people

      •  Those are the options (0+ / 0-)

        but other than Intel and GE, recently, most of the top beneficiaries of the Bush tax cuts, are taking the third option:  working their workers harder.

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