Stimulating Failure

[natrat]

November 7, 2009
Stimulating Failure
By Investor's Business Daily

The Job Report: Another month, another drop in payrolls. Will it ever occur to our leaders in Washington that what they're doing isn't working - and may actually be damaging our economy?

News that the unemployment rate jumped to 10.2% in October, its highest level since 1983, as the economy shed 190,000 nonfarm jobs, underscores the spectacular failure of the so-called fiscal stimulus to stimulate anything other than economic misery.

Since the $787 billion stimulus was passed in February, the economy has lost 2.9 million jobs - for a total of 4.3 million since the end of 2008. The silver lining, some say, is the number of jobs lost each month is shrinking. But they lose sight of this: There's no guarantee the economy's 3.5% growth in the third quarter will continue.

Indeed, some worry the economy is on a slow-growth path that will lead to permanently high joblessness, weaker income growth and fewer opportunities. The Blue Chip consensus of more than 50 economists nationwide expects unemployment to remain above 8% at least into 2012.

Why should this be? Well, start with the fact that virtually all job growth comes from companies with fewer than 500 employees, and that startups and very small businesses are responsible for more than half of all new jobs.

Today, these entrepreneurial job creators are running scared. That the White House vows to jack up taxes on those with "high incomes" (that is, entrepreneurs) is one reason why. Next year's scheduled expiration of the Bush tax cuts that pulled the economy out of the 2001 recession is another.

Higher income taxes, a flood of stiff new regulations and the possibility of at least $2 trillion in new taxes related to cap-and-trade and a health care overhaul over the next decade have created a climate of uncertainty - for small and large businesses alike.

Businesses are hunkered down. They have $1 trillion in cash stashed away, but they won't invest out of fear it'll be taxed away or some government czar will tell them how to run their business.

At the same time, banks have a record $800 billion in reserves but can't seem to find any worthy borrowers.

The White House claims its stimulus "saved or created" 640,000 to 1 million jobs. But no evidence shows that's true. Stimulus has failed. If anything, borrowing hundreds of billions of dollars to fund such feckless initiatives is destroying private-sector jobs. Time has come for a dramatic change of course.




http://www.realclearmarkets.com/articles/2009/11/07/stimulating_failure__97495.html

[lapfog_1]

1. What a load of economic trickle down bullshit.

Investors Business Daily.

Should have known.

[OffWithTheirHeads]

3. +10

[Vincardog]

2. How about we make this rule "80% of every dollar spent on stimulus has to go to salaries?"

And executive compensation is not included in those salaries

[geek tragedy]

4. Thank you for outing yourself, troll.

Today, these entrepreneurial job creators are running scared. That the White House vows to jack up taxes on those with "high incomes" (that is, entrepreneurs) is one reason why. Next year's scheduled expiration of the Bush tax cuts that pulled the economy out of the 2001 recession is another.

Higher income taxes, a flood of stiff new regulations and the possibility of at least $2 trillion in new taxes related to cap-and-trade and a health care overhaul over the next decade have created a climate of uncertainty - for small and large businesses alike.

Posting RNC propaganda here. Very nice. Alerted.

[Ghost Dog]

6. Thing is, there is much that is right and wrong on both sides

of the divide. And economics (oh, and let's not mention 'ecologics', of course), like any (putative) science, and ideologies, tend to be uncomfortable, although, for sure, inevitable, bedfellows.

Fact is, far too much so-called 'stimulus' has gone to, and stayed, in Wall St. (and City of London) pockets. Real economies, real people, suffer. The 'Keynesianism' has not been Keynesian enough; the 'socialism' (don't make me laugh - go read Marx) not socialist enough by a long shot.

And nor has the so-called entrepreneurialism.

The rest, as has been said, is (already) history.

[geek tragedy]

7. This piece calls for more tax cuts for the wealthy.

It could have been written by George W. Bush himself.

[Ghost Dog]

9. Yeah, well that's just one of the huge flaws in this type of argument.

In my past experience as an attempting startup 'entrepreneur', for example, "high income" has been, far beyond a joke, like an inverse description of the reality.

But then, I never did discover any kind of relationship with BANKERS that I could accept (nor they with me, I suppose), so had to attempt to go it alone.

[geek tragedy]

5. How many of you clueless morons who rec'd this

actually read it?

Or are you all just a bunch of Freepers?

[girl gone mad]

8. I don't believe that fear of higher taxes is even a blip on the radar of businesses.

It's fear of having no customers that is leading them to lay off employees or curtail expansion plans.