House Republican Leader Boehner finally lays out objections and Republican plan
John Boehner, House Minority Leader, finally put on his website Republican ideas for an Economic Recovery Plan.
Basically, he intimates that all spending for infrustructure, technology, and research and development should be eliminated. Instead, the Republicans want a smaller plan that consists only of tax reductions.
While some of the tax reductions do make good sense for both small businesses and individuals, others are ludicrous, given the unpredictability of the economy in the future. But more than anything, Boehner and his fellow Republicans miss a salient point: you can cut business taxes and capital gains to zero and it still won’t do any good if no one has the money or confidence to purchase the products produced.
Right now, we have an economy with the lowest consumer confidence in 60 years and unemployment that is expected nationally to be at 9% within a few, short months. It’s rapidly approaching or already reached 10% in some states. Those people with jobs are saving every penny they can just in case they get laid off next. Those without jobs can’t find another. Even grocery stores are laying off workers!
Tax reductions take months to affect a company’s ability to hire. First, companies need buyers. Tax reductions provide their best help during good economies when companies need to expand their workforce and distribution network and spend more on research and development. Cutting taxes on companies that are retracting because their sales revenues have plummeted won’t do any good in the short term. Companies won’t hire new employees to service non-existent customers just because the companies received a tax reduction. Profits on the few existing sales may increase, but increased employment won’t.
American workers need jobs first and foremost…and that is supposed to be one of the major goals of the Economic Recovery Plan. Plus, the U.S. needs to invest in the latest technology, research and development, and education to thrust U.S. businesses to the forefront of competitiveness. Last week, IBM’s CEO, for example, told Fareed Zakeria on CNN’s GPS the U.S. government needed an Economic Recovery Plan that mainly spent on infrastructure, such as high speed rail, new highways, upgraded electrical grid, broadband, and all the other technological advances that will make businesses in the U.S. more competitive with those in other countries.
While the world has surged ahead with new infrastructure, ours has lagged behind. As a result, it costs American businesses more time and money to compete in this global economy.
If Republicans really care about jobs and businesses, they need to wake up to the 21st century, the global economy in which business exists, and the need to improve our country’s physical competitive edge. Giving tax breaks won’t build high speed rails, won’t build new highway systems that utilize new technology, won’t fully fund the research and development of new technologies and sciences (the way DARPA did), and won’t build out the world’s best electrical grid and broadband network. That kind of spending only comes from government.
Hundreds, if not thousands, of these kinds of projects are ready to go, just waiting on funding, and thousands more are well into planning. With public funding and public-private partnerships and DARPA-like agencies, millions of jobs could exist within a fairly short time, public and consumer confidence would rebound, and businesses would see increased sales.
Overall, the Republican “reduce taxes only” plan is an abysmal failure as an Economic Recovery Plan for the U.S. worker and the failing U.S. economy.