The Republicans are going all-out to promote their alternative to the Democratic jobs bill, despite the fact that the Democratic bill already passed through the House of Representatives by a 60-vote margin.
Anyone who stayed awake through Economics 101 knows that both tax cuts and increases in government spending are expansionary fiscal policies; which one you use depends on what you’re trying to accomplish. Right now we need to create jobs, which raises the question, whose policies are better for job creation? Democrats or Republicans?
The graph below compares progressive economic policies (blue) to conservative economic policies (orange) in terms of their effect on job creation:
And the following analysis from economist Mark Zandy shows the return on investment for several forms of tax cut versus several forms of government spending:
As you can see, the most effective tax cut–a payroll tax holiday–produces $1.29 for every $1 spent toward implementing those cuts.
But every spending increase is a more worthwhile investment than even the best tax cut; policies that increase spending produce returns of anywhere from $1.36 (aid to state governments) to $1.73 (increases in food stamps) for every dollar spent.
And, as it turns out, the Republican proposal will cost three times as much as the Democratic job creation plan in the long run:
It’s clear that the Republicans have no idea what they’re doing. The GOP controlled Congress for 6 out of the past 8 years and they controlled the White House for 8 of the past 8 years. This economic crisis happened on their watch and it happened as a result of their policies–their deregulation, their tax cuts, their irresponsible spending policies, their governance.
They proposed tax cuts when the economy was good, they proposed tax cuts when the economy was bad, and now they’re proposing tax cuts when the economy is worse. No matter how bad things get, the GOP will still be pushing tax cuts despite the fact that–as the above analyses show–they’re just not cost-effective forms of economic stimulus. The GOP will continue throwing good money after bad as long as it gets them more tax cuts.
We can’t afford to keep following the same people who got us into this mess in the first place. Republicans complain that they’re being shut out of this process, but they had their chance–they ran the economy for the past eight years and look at where it got us. That’s why the Democrats now control both houses of Congress and the White House–because the Republicans failed.
So let’s stop pretending the GOP has any credibility left on economics and just pass the job creation bill so we can get our economy back on track after 8 years of Republican mismanagement.