The economy through the eyes of the opposition
Armstrong Williams | 1/12/2012, 1:45 p.m.
Companies increase employment because they have additional business that needs to be processed and they cannot process it through overtime or increased capital. No businessman in his right mind would hire someone merely because labor is 10 percent cheaper because of tax credits. He would only increase employment if that is his only alternative to process additional business. If he has additional business, then he will hire additional employees regardless of the 10 percent credit. Therefore, the credit is an inefficient way to increase employment and a waste of taxpayer money.
Fifth, their plan for a serious budget reduction in the future does not work without a big initial down payment in spending cuts. Today's Congress cannot bind future Congresses, and Congress has been notoriously unreliable with respect to the fiscal management of the country's finances.
Only a naive observer of today's political environment could believe that Congress will constrain spending to bring the deficit under control when the economy improves. The only point that the left may have is that fiscal stimulus may have a small temporary benefit when the money is first spent, but the extent of the benefit depends on how the money is spent, e.g., infrastructure, tax rebates, government program, etc., and technical arguments about the multiplier effect of the spending. However, it has a negative impact when it is finally paid for.
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