Admit it: tax cuts have failed to create jobs

[4dsc]

http://desmoinesregister.com/apps/pbcs.dll/article?AID=/20040810/OPINION03/408100302/1035/OPINION

I love facts!!

{b}The American public has heard it over and over the past three years: Cut taxes and job growth will ensue. The Bush administration has repeatedly pushed the theory that cutting taxes would result in more jobs and better pay for average Americans.

The opposite has happened. The jobs aren't there. American workers are making fewer dollars, on average. So it's time to get honest about the best way to create jobs in this country and change strategies to accomplish that goal.

There are 1 million fewer jobs today than there were when President Bush took office. Last month, employers created about 32,000 jobs, not even enough to provide work for the new people entering the job market as population grows. It's one-tenth of what would be needed on a monthly basis to meet the early promises of the Bush administration.

[harrison]

1. I am no economist, but cutting taxes for the wealthy would

not seem to create jobs. Wealthy folks buy microwaves, cars, etc anytime they want to. However, if middle class folks were given a big tax cut, then I think they would be spending it on stuff like microwaves, new cars, etc.

Just my guess. I am sure a real economist can straighten me out.

[the Kelly Gang]

3. simply put and it's the truth..

[lapfog_1]

2. The theory is called "trickle down" economics

But GHW Bush called it "voodoo economics". I suspect he is right.

The theory goes like this, cut taxes, especially for the wealthy,
and more capital becomes available. The rich, not wanting their
capital to remain idle, will find ways to invest it, usually in
the stock market or in private equity markets... either way, that's
more money available to corporations so they use it to expand...
and presto, you have growth... more people become employed, have
money to spend, buy goods, and boom you have economic expansion.

Only a couple things wrong with this.

First, we haven't been an investment constricted economy for
years and years. It's has been driven by consumers. No consumers,
harder to make profits, no profits - investors look elsewhere to
invest, and no job growth (or almost no job growth).

Second, what happened after the tech bubble popped was that
corporations started looking not at growth, but at profits...
even if it meant negative growth. So they started squeezing
the bottom line by reducing costs. You reduce costs by shifting
jobs to overseas, eliminating other jobs, shifting the cost of
health care to employees, and so on. Corporations returned, by
and large, to profitability, but without the need for any capital,
and without growth ( top line growth ). That sent the stock
market back up from the post bubble days, but we are moving sideways
now... and perhaps for a long time to come.

So trickle down just doesn't work... the availability of
capital is not sufficient, by itself, to trigger growth.

Increase consumption of American made products and we will increase
the number of people working, more people working will mean more
competition for labor, the better the salaries for everyone.
The more money in the labor market, the more consumption will
be stimulated.

[Union Thug]

4. The only economic strategy that has worked for the working people...

of this country is known as Unionism.

Workers of the world UNITE!