While driving today I heard a brief report of economic news - none of it good. Job claims were higher than expected indicating a slow job market getting even worse; income has remained flat for months now and spending rose at only .4% last month, with virtually all of the increase accounted for by higher gasoline prices. As an oily-voiced economist remarked "with 2/3 of the economy based on consumer spending, this could indicate sluggish growth for the US economy for the rest of 2011." On the same day that I heard this report, I read that my good-for-nothing governor Rick Snyder signed a budget handing out $1.7 billion in tax breaks for corporations, raising taxes on pensioners and cutting spending in virtually every corner of the state. As the mother of two children, I was particularly distressed by the $300 per pupil funding cut schools were handed.
Now, of course, the justification for giving such goodies to our business community was so that they will create jobs. It occurred to me that given the low level of consumer spending, no income growth for the vast part of the workforce and low job growth, we could have the perfect little laboratory to test supply-side economics. I say, let's stop spending money! If the Republicans are correct, the tax cuts should work anyway, giving us all jobs and rising prosperity on their own. If demand-side measures have been abandoned by our political classes, who are we to try to stimulate demand by spending money? Why don't we just see how far corporations, more and more unfettered by regulations, taxation and social costs, can go in expanding their markets and profits without robust consumers? And even if it doesn't work, why not keep your money as much as possible instead of giving it to selfish corporations. Houses will be less cluttered, bank accounts fatter, and oily-voiced economists increasingly alarmed...
