In the upside down world of the GOP spin-meisters we must all bow down to, coddle and protect the JOB CREATORS. Give them tax breaks that mean they pay a lower effective rate than the vast numbers of W2 wage earners.
The truth is people who run businesses are there to make a profit by meeting DEMAND of consumers and other businesses and government. Without demand there is no business and when the economy slows down it is because DEMAND has slowed, not becuase JOB CREATORS are in a snit over their tax rates. This is especially true in an economy that is well below capacity.
Henry Ford (that well known socialist) paid his worker three times average wages so they could afford to buy his cars. He understood, no demand, no sales, lower profits.
Why can't the GOP understand this? They remain committed to supply side economics which contends " if we build it, they will come". One could say that, perhaps, of Steve Job's products but very few others.
In an economy where aggregate demand is failing to employ tens of millions of people, more than willing to work, it is demand creators who we need to coddle and nurture, not job creators. If people demand, then companies will seek to supply and in the process create jobs. That is really how the system works.
So how do we create more demand creators?
The temporary payroll tax cut is one way to put cash in the hands of people who will spend most of it, thus boosting demand. I feel this is a band aid that has its downsides of likely being spent on things of short term value and a lot on imports.
I would like to see the government build a great deal of new transportation infrastructure, repair the current infrastructure and upgrade the power distribution grid. This creates a great deal of demand and long term value and is likely local in nature. This is the right time to do it, given we can borrow long at very low interest rates. This is a far healthier way than defunding social security for short- term growth stimulation.
And the point of this diary is, don't let the GOP spin- meisters get away with the false choice of never taxing the wealthy because it will hurt their job creating behavior. History and facts shows that this is simply untrue. Even when upper tax rates were 70 pct you cannot find evidence that business failed to meet demand, when it was there.
The failure to keep wages growing with increases in productivity and the fear induced reduction in aggregate demand, also hurt by governments being more debt focused than job and demand creating focused, all combine to create an underperforming nation.
Shame on us all for not working out a better solution that puts millions more to work faster. Where is FDR when you need him?