Stimulus, or just another big government spending plan?
On both the state and federal level the current focus is on the economy and how to stimulate its growth. As the details of both plans become known, it becomes apparent that these plans are really little more than thinly veiled plans to grow the size of government, increase our dependence on government, and further remove our economy from capitalism towards socialism. In fact, whether we look at either the federal or state plan, there is very little in either plan that will actually stimulate the economy.
As President Obama tries to pressure the Senate to quickly pass the stimulus plan before the public discovers the truth, he has tried to minimize the outcry regarding the cost and amount of spending by saying that the very basis of a stimulus plan is spending. While it is true that an effective stimulus plan will involve some spending, not all spending will actually stimulate the economy or create jobs. Japan tried to spend its way out of a very similar situation in the 90’s. Japan’s problems started much the same as ours, with a mortgage bubble where property values were elevated above sustainable levels. Japan spent trillions of dollars over 10 years trying to support property values and create jobs with no real success. The same will happen here. We are spending billions of dollars and in the end the only thing we will have accomplished is accumulating billions of dollars of additional debt or create massive inflation.
Both the president and the senate majority leader have said that this stimulus bill will create 4 million jobs in the next 2 years. They fail to mention how many additional jobs will be lost because of this bill. As government moves corporate America from capitalism toward socialism and dictates what products industries are allowed to produce, there will be massive job losses in the industries that government has determined should go away, such as the coal and petroleum industries, conventional electrical power companies, conventional automobile manufacturing, and the airline industry. At a cost of nearly 800 billion dollars, that equates to a $200,000 cost for every job they hope to create. If interest is included, the cost to create one job balloons to nearly $400,000. I fail to see how this is cost effective and I think it is very optimistic to assume that 4 million additional jobs will be created in the next 4 years much less in the next 2.
The whole goal of a state or federal stimulus bill in theory is to create jobs. Government does not and can not create jobs. Businesses create jobs, therefore the most effective way to create jobs and stimulate the economy is to allow businesses to be successful and encourage growth here within our borders by reducing the corporate tax rate and eliminating the restrictions that are choking small business growth. This approach is needed in Ohio as well as at the federal level. Very few of the jobs that left Ohio went overseas, most were relocated to other, more business friendly states like Texas and Tennessee. By reducing the state and federal corporate tax rates, we will allow businesses to reinvest in themselves, creating a need for additional employees, which will revitalize our communities and in the end increase potential tax revenues.