Bogus Job Creators
It's one thing to argue about how our climate will affect us decades from now.
It's another to deny how our economy works today.Here's one economic falsehood that's trashing our country's politics, policies, and credit.
"High-income taxpayers are the Job-Creators in our society. Their investments in dynamic businesses supply the money for hiring. Raising their taxes will discourage these investments and destroy jobs."
It's not hard to see how untrue this is.
First, America tried it and it didn't work. Congress' own studies say that tax cuts are the least effective way to boost employment. We all know that the Bush tax cuts came in 2001 and 2003, and what did we get? The jobs picture has been worse, not better, for most of us and our neighbors during the following decade. What we did get was an investor-led crash and recession.
Second, corporations don't need more money to create jobs. They've been hoarding cash. They're awash in the stuff and looking around in vain for opportunities to put it to work growing their businesses. The reason American businesses aren't creating jobs isn't lack of capital; it's lack of demand. If Washington's policies could get you, me, and our neighbors to spend again, we would be the Job-Creators.
Third, the biggest area of job-creation is not where the rich invest anyway. A new study shows that existing firms are net job destroyers, losing 1 million jobs net per year on average from 1977 through 2005. By contrast, in their first year, new firms add 3 million jobs a year. That quiet start-up that's hiring in your town is virtually invisible to large investors. Even if discovered, the fledgling company is too small to absorb much of a multimillionaire's funds.
So why is The-Rich-Are-Job-Creators falsehood so strongly pushed that it's paralyzing our legislature and risking national default? Can anyone help me out here?