Apparently Senator Brown has really had it with fluff. Addressing the Boston Chamber of Commerce yesterday, he said, “I can’t go back to Washington later today and start working again on fluff, when we should be focusing on the very important things that can get our country and our state moving again.” This was only a couple weeks after he confessed to the New England Newspaper and Press Association that “most of what we talked about” in the Senate was fluff.
The Senator did not indicate whether, on fluff grounds, he would be suspending work on the “Five-Star General Commemorative Coin Act,” heretofore one of his priority items.
What he did say was that it’s time for Washington to focus on the peoples’ will. He complained that Congress has devoted only 12 days to job creation since he took office in February. So here’s an idea (100 percent fluff-free) to pass along to him for a 13th day of work on job creation in Congress:
Ending the Bush-era tax cuts for the wealthiest Americans and
Extending unemployment insurance for the 15 million Americans who remain unemployed and are looking for work.
Tell him you’re the people and it’s your will. Plus it’s toll free. Call 1-866-606-1189, and they’ll connect you to his office.
I understand he had a thing against Fluff too!
Ok, whether you agree with letting the tax cuts expire and/or with extending unemployment benefits, how would either help to create jobs?
and they’ve got little wealth, they spend it. They buy food, transport, clothes, medicine, etc. When they do so, the folks who work in those stores, who work to transport the stuff, who work to manufacture the stuff, who work to design the stuff, etc…. all work too.
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p>The person who received public assistance may not have a job, but that person, in spending the money, helps other people hand on to their jobs.
And this is particularly important given that over two-thirds of overall economic growth in the US is due to consumer spending.
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p>All the more reason to target tax cuts and cash assistance to those most likely to spend it.
Retail stores make up 13 percent of the nation’s private sector workforce, and holiday sales make up 1/5 of their annual revenues. If there’s ever a good time to cut off the meager UI benefits of people who are looking for work that doesn’t exist yet, surely the Christmas season isn’t it. (Link to cited stats here.)
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p>aside from the aforementioned spending to be done, unemployment benefits allow the unemployed to actually look for work rather than, say, housing or their daily bread…
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p>Or, put another way, assistance to the unemployed shortens the length of unemployment and lessens the misery therein.
Ok, I can see a certain logic to the statement: that if people have more money to spend, they spend it. But how does that say that letting the Bush Tax Cuts expire would create jobs? The wealthy Americans would have less money to spend. While I may be in favor of letting the cuts expire to help close the deficit gap, can it really be argued that its job creating?
See this:http://donklephant.com/2010/09/13/moodys-rich-dont-spend-tax-cuts/
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p>Long story short: the rich save and invest. Other items I’ve read suggest that they no longer invest in the kinds of vehicles that used to feed back into the larger US economy; they invest more in financial vehicles that enrich only the financial class.
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p>Tax cuts for us little people, however, go back into the local economy more directly. People of more ordinary means will tend to spend their money on groceries, car repairs, appliances, local services, the kinds of things that are more likely to spur local job creation. Businesses hire when there’s demand calling for it.
that if the rich get to keep more of their money, they will invest it in the economy in a way that creates more jobs. It’s AKA trickle down economics. I don’t know what they do with their extra disposable cash, but evidence shows that it doesn’t seem to work out that way. We poor shlubs OTOH, spend much, if not all of our paychecks, if we have one, on the expenses of daily living, such as food, shelter, clothing, gasoline, and have little or nothing left after that. If we get a tax cut, all of it goes right into the economy buying those necessities. Which cut do you think will have the quickest, surest effect on the recipient and the economy?
When demand sags, people with capital save it until demand grows and creates opportunity.
If you reallocate the $700 billion in tax cuts that’s currently going to the richest two percent of Americans, either by extending tax cuts for the middle and lower class, by making those cuts permanent or some combination of both, you’ll put more spending power in the hands of those likely to spend it, as in the UI example.
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p>Alternatively, directing some of that $700 billion to continue assistance to the states would also help to stimulate the economy and create jobs. State and local governments have eliminated more than 400,000 jobs since August, 2008 and have also cancelled contracts with vendors and reduced payments to nonprofits providing services. All of these actions slow recovery.
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p>The least stimulative use of the $700 billion is to add it to use it right now to increase the wealth of the wealthiest two percent of Americans.
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p>Links here and here.
Ok, lets take it as a fact that rich people spend differently than less wealthy. Lets assume that they are more likely to invest rather than spend. That still doesnt explain why letting the tax rate revert to pre-Bush levels will create jobs. If the Bush cuts are maintained they have more money, which they will either spend (creating jobs) or invest/save (not creating jobs). If the tax cuts are allowed to expire, the wealthy will either spend less (hurting job growth) or invest less. I can be persuaded that letting the tax cuts expire would be good for deficit reduction. Im just arguing that I have yet to be convinced that it can be classified as good for job creation.
One of the arguments against taxing the rich is that the rich won’t work as hard when more of their income goes to the government. So let’s assume that happens. Let’s assume that Joe the Plumber is going to stop working 80 hour weeks because too much of his money is going to the government. He’s going to let work go undone.
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p>That means an opportunity for another plumber. A job created, so to speak.
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p>OK, let’s try something else: let’s assume that Joe the Plumber is still going to work his 80 hour weeks, but he really, really hates paying taxes on that income. So instead of just taking profits far above what he needs to live, he invests in his business and takes tax deductions. Maybe he hires a marketing person. Maybe he gets his employees some training. He does things that will ensure the long-term viability of his business instead of succumb to the temptation of cashing out.
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p>Jobs are created.
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p>Let’s assume that Joe the Plumber says “screw this, I’ll still work the same and will just take less home in profits”. So he has less money to throw to his investment broker — who was very likely investing in companies in emerging markets like China or giving other companies capital to move their production to China. Or maybe his investor was speculating in the commodities market, driving up the price of oil or precious metals. Seems like a winner for the US economy to me if that money isn’t out there.
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p>Meanwhile, with the increased tax revenue from Joe, the US government does not have to cut services to (and employment of) middle and lower (i.e. consumer) classes, so demand from that group does not evaporate.
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p>We had a US Rep candidate out here in Western MA who correctly identified that the economy’s problem was a “lack of demand”. Of course, he then turned around and suggested “tax cuts on businesses” as the answer — which made no sense. If I’m a business owner, who do I want to have more money? My customers.
Businesses want customers with money to spend – tax cuts are no help, they are the least economically stimulative action we can take. See this article here:
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p>http://www.usatoday.com/money/…
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p>For most of us, economic decisions are made in the margins. For the wealthy the margins are so very very wide. So wide, in fact, that they often lose sight of the other side of ’em and are not, therefore, forced to make decisions as a result. I, poor sod that I am, for example, have to buy a car that gets good gas mileage because the margin between my paycheck and gas prices is a slim one. Likewise, I prize durability and ease-of-maintenance/part replacement over other factors for much the same reason. Someone who doesn’t even fill their own tank isn’t forced into this calculus. They, therefore, make the choice to purchase a car for entirely different reasons. They are, in word and deed, divorced from the price of gas and/or maintenance.
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p>It is no different with taxes. It is entirely possible that no wealthy person is making any extra decision, over and above how they usually park their cash, in re: the Bush tax cuts. So they have a billion dollars resting comfortably in a bank making X percent? Ok. Retire the tax cuts and they have nine-hundred mil making that same x percent. I’m certain that if they thought about it (and some do…) they’d feel somehow slighted. I’m equally certain, however, that if they didn’t think about they would not, in any way, feel impacted.
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p>What’s more, that 100K is no longer lounging around earning that measly X% but rather being put to work, rather strenuously I might add, by the government with multipliers and jobs programs and education funding and targeting, etc… It’s like it’s been taken out of it’s cozy little hide-away and sent to a fat-camp to increase it’s energy and output.
let’s see what Brown does with this “important” legislation, but he didn’t co-sponsor. A bit unfair, even though it’s a Republican Act.