Sunday, November 28, 2010

Who can stimulate the economy?

Regarding a Sacramento Bee editorial: “Jobless, not richest- deserve helping hand”, the real argument isn’t about “tax cuts” for the so-called wealthy; it’s about stability in the tax structure to allow investors and business to plan investment and expansion. You can’t do that when you don’t know if your taxes are going up or staying the same.

It’s why banks aren’t lending and businesses aren’t expanding. They’re not sure of the future in terms of taxes and regulation, so why take any risk at all? Instead, they’re hoarding unprecedented levels of cash – cash that could be used in expansion and more employment. Even Paul Krugman, the economist darling of the left, ought to be able to understand that.

To be fair, the Bee rightly agrees with the GOP assertion that any extension of unemployment benefits must be accompanied by a corresponding reduction in actual government spending. However, their leftist insistence on penalizing individuals earning more than $200,000 and couples earning more than $250,000 a year is wrong-minded thinking at its worst. When was the last time a member of the working poor created a business that created jobs?

Once again: government cannot create jobs and stimulate the economy – only a prosperous private sector can.

Why is that so hard?