Tax Cuts, Jobs and the Economy ....

We can't show pictures of half naked women all the time, and try to keep our credibility up. Every once in a while, you gotta discuss actual issues. Since we have the day off, we'll try to do that today. Naked chicks will be back soon though....



We were able to catch Fox News Sunday, and the topics were mainly about the economy (stupid), and the reationship between tax cuts and jobs. Essentially, here is the scenario: the Bush Tax Cuts are set to expire at year's end, and both sides of the aisle are trying to figure out what to do from there. Republicans naturally want to extend the cuts, which Democrats view as elitist and ineffective to growing the economy. Democrats are currently pushing letting the Bush Cuts expire, and replacing them with targeted tax breaks for small businesses and lower income people. The theory is that poor people spend a greater proportion of their income, thus all of it will go towards stimulting the economy, and creating jobs. So, which is right?



For starters, I'll give the Democrats credit for finally seeing the light, at least to a certain extent. A couple years ago, many Dems on The Hill had a hard time understanding the correlation between the two. However, even that is flawed. I think the most important thing we have learned in the last year or two is that the Federal Government - as huge as it is getting - is miniscule to the size of the American Economy. Like we've said before, the government cannot control the economy, it only sets the table for it, and the private sector takes it from there. The $814 billion spent last year didn't do a hell of a lot, another $25 or $100 billion won't have any effect as well...



I'll tell you what the Obama Administration's biggest problem is: the unknown. There is this thing in business called forecasting, and they all live and die by it. With all the regulation, buyouts, government agencies, czars and yes, Health Care, American business is stuck in fog as thick as peanut butter or pea soup, whichever you prefer. They can't see the future, so they can't tell what the f**k is coming up, and that's why many companies are turning a profit, but sitting pat and not hiring. In short, they went overboard, and business got spooked.....



That's the past, but what about now? Well, it almost doesn't really matter economically. We're in a protracted recession, and it will likely be that way for at leats another year or longer. Politically, the Democrats are in deep shit. Why? Because the public is in a state of IDGAF (I Don't Give a F**k).... Simply put, they're all jaded with promises not met by both sides, and until it DOES visibly improve, no cut will change their vote in November, and right now, that means a Democrat net loss. A pretty steep one.. But, we'll discuss it anyway.



So, which works better - tax cuts for the rich or poor. It's kind of like the Chicken and the Egg. Yes, percentage wise, lower income people given a tax cut will spend more of it, which could lead to job creation. The flipside though, is that higher income earners are the ones who actually CREATE the jobs by and large, so some extra $$ in Wentworth Livingston III (aka Trey)'s bank account might more effectively be used to hire employees at his firm, or to buy stock, which gives them low-cost capital. Or, he might just throw it in the bank, and leave it there.. It's a crapshoot. So, as usual, maybe both sides are a little right. We all could use a tax break, along with some serious spending cuts for BS we don't need. However, nothing is going to do the trick anytime soon.

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