Lower Spending and Corporate Rates: Robin Hood in Reverse
Republican leadership in the House is acting fast to show the American people that it is committed to creating jobs. Step one is a flashy new website and a Twitter campaign known as #4jobs. So, I looked around to find out what the substantive measures of this effort are and if any of them can conceivably produce jobs. First off, I discovered that the website is not much more than flashy and hyperpartisan talking points without specifics - it's curious that the GOP has touted this so heavily. There's even a link to a page where you can track the House's legislation, replete with big, red, flashing STUCK IN THE SENATE blurbs next to most of the bills.
Perhaps the most amusing and unsettling part of the website is how wealthy Americans and corporations have been rebranded as"job creators." One of the primary goals of the House plan is to "fix the tax code to help job creators." If you read the fine print, that means lowering the corporate tax rate from 35% to 25% without addressing loopholes of the sort that allowed GE to pay $0 in taxes. In short, it decreases revenue by a significant amount. True, this helps big businesses, which happen to create many jobs. However, corporations only create jobs (or do anything, for that matter) when it is profitable to do so. Handing them big tax deductions doesn't suddenly make it profitable for companies to create jobs. It just enhances their current margins (and subsequent executive bonuses).
The rest of the plan is similar. It's about removing barriers to companies (i.e. taxes and regulations of all sorts and sizes), ostensibly so that they can acquire the freedom they need to create jobs. The key factor that is being overlooked: once they have this freedom, they won't necessarily use it to create jobs. Companies will still conduct business as they have in the past - including periodically shipping jobs overseas, automating systems, and laying people off. The only difference is that now they'll have additional liberties like avoiding "frivolous lawsuits" and dealing with a more toothless EPA. At best, it's a vaguely supported idea that altering the regulatory climate for conglomerates will create jobs. At worst, the adverse effects on worker safety, tax revenue, and the environment are so great as to totally counterbalance any resulting economic stimulus.
The biggest forehead-slapper of all is the component of the plan where cutting spending directly leads to businesses creating jobs. I'm all for trimming government spending, especially when it's wasteful. But the supposition that slashing this spending will lead to a tangible increase in jobs is ludicrous. Do the plan authors really believe businesses will say to themselves, "Now that the House plan 'moves America away from a debt-driven economy' [Source: aforementioned website], I can finally produce the many jobs I've been waiting all these years to create"? I think not.
As I pondered the various elements of such an ambitious, government-shrinking House plan, I wondered what my own jobs plan would be. I'd start funding National Science Foundation research projects more, especially in the field of clean energy. They can lead to groundbreaking advances in technology that end up creating private sector jobs in new industries. Sometimes, few companies are adventurous enough to support such research because it's unclear if it will lead to profitability. Second, I have noticed that the high unemployment rate coincides with a lot of "help wanted" listings around my area. If all those positions were filled, the jobless rate would plummet. Funding training and certificate programs at community colleges can help give people the skills they need to land these jobs. Meanwhile, a redoubled focus on K-12 education can help ensure that young people have the tools they need to succeed in a competitive workplace at the time of graduation. Those are some of my ideas. What are yours? Feel free to speak your mind in the comments.
