Tax cuts have not created a single job

[dddooo]

Sluggish private job growth indicates failure of tax cuts

If tax cuts have created jobs at all since 2001, it will have happened in the private sector. Assuming that job growth in 2006 matches the Bush Administration's projections, the economy will have added about 2.0 million jobs to the private sector from FY2001 through FY2006. But how many of these two million jobs actually can be attributed to tax cuts and how many to increased government spending—particularly increased defense spending—in this period?

Based on Defense Department estimates of the number of private-sector jobs created by its own spending, we project that additional defense spending will account for a 1.495 million gain in private sector jobs between FY2001 and FY2006. Furthermore, increases in non-defense discretionary spending since 2001 will have added yet another 1.325 million jobs in the private sector, for a total of 2.82 million jobs created by increased government spending. Increased mandatory government spending—which is not even included in these estimates or the accompanying chart—would account for even more job creation. The mere fact that the projected job growth resulting from increased defense and other government spending exceeds the actual number of jobs projected to be added to the economy through 2006 clearly indicates that the tax cuts hardly seem plausible as the engine of the modest job growth in the economy since 2001.
http://www.epi.org/content.cfm/webfeatures_snapshots_20060126

 

[Covertibility]

I'm curious as the quality of jobs created not so much quantity. Then again, why hire an American when you can hire a cheaper Chinese counterpart at a fraction of the cost.

 

[Smart Money]

Quote from dddooo:

Sluggish private job growth indicates failure of tax cuts

If tax cuts have created jobs at all since 2001, it will have happened in the private sector. Assuming that job growth in 2006 matches the Bush Administration's projections, the economy will have added about 2.0 million jobs to the private sector from FY2001 through FY2006. But how many of these two million jobs actually can be attributed to tax cuts and how many to increased government spending—particularly increased defense spending—in this period?

Based on Defense Department estimates of the number of private-sector jobs created by its own spending, we project that additional defense spending will account for a 1.495 million gain in private sector jobs between FY2001 and FY2006. Furthermore, increases in non-defense discretionary spending since 2001 will have added yet another 1.325 million jobs in the private sector, for a total of 2.82 million jobs created by increased government spending. Increased mandatory government spending—which is not even included in these estimates or the accompanying chart—would account for even more job creation. The mere fact that the projected job growth resulting from increased defense and other government spending exceeds the actual number of jobs projected to be added to the economy through 2006 clearly indicates that the tax cuts hardly seem plausible as the engine of the modest job growth in the economy since 2001.
http://www.epi.org/content.cfm/webfeatures_snapshots_20060126

You're forgetting about all of the left-wing political pundits who owe their living to criticizing the tax cut. No jobs were created for the pundits who advocate cutting spending, the real problem, because there are none.

As an aside, my dream is to have a used Porsche 356. A cool antique car predating the mid-1960s. I can buy one for about $13,000 out of Hemmings motor news, but with a wife, a family, and a mortgage, there is no way to justify the expense. Yet every year, I pay enough taxes to buy at least one, possibly two of them and I give that money to the government. In fact, I have assets that go to the family, and individual stocks, but I can point to no one item that I can say is mine, and mine alone, that I own that costs as much the (reduced) taxes that I pay every year. And if I don't pay, I go to jail. (Ok, now I'm depressed)

The taxes should be a small fraction of what they are. The real problem is how much spending is going on due to pork projects. Harp on that.

SM

 

[dddooo]

Quote from Smart Money:

As an aside, my dream is to have a used Porsche 356... Yet every year, I pay enough taxes to buy at least one

That's because before you can own a car you have to be provided with roads, bridges, tunnels, DMVs, traffic lights and traffic cops, you have to be protected by the police against car thieves and uninsured motorists, NSA and FBI have to wiretap your communications to make sure you're not calling Osama, the military have to protect our borders against Iranian or Syrian invasion and fight "them" over there so that they don't come over here. What, did you expect all these services for free?

BTW You may want to consider leasing a used porsche, it's cheaper
http://smartcarfinder.com/used-cars/models/Porsche.html

Quote from Smart Money:

The real problem is how much spending is going on due to pork projects.

Nobody is disagreeing with that but what does it have to do with the main point of the research that tax cuts did not create jobs?

 

[Hamlet]

Quote from dddooo:

That's because before you can own a car you have to be provided with roads, bridges, tunnels, DMVs, traffic lights and traffic cops, you have to be protected by the police against car thieves and uninsured motorists, NSA and FBI have to wiretap your communications to make sure you're not calling Osama, the military have to protect our borders against Iranian or Syrian invasion and fight "them" over there so that they don't come over here. What, did you expect all these services for free?

BTW You may want to consider leasing a used porsche, it's cheaper
http://smartcarfinder.com/used-cars/models/Porsche.html


Nobody is disagreeing with that but what does it have to do with the main point of the research that tax cuts did not create jobs?

All those services you mentioned are necessary and deserving of our tax dollars. When one complains of paying too much in taxes, as the above poster did, he or she is usually not referring to paying for those particular services, as most are happy to pay for them. The problem is all the pork, waste and exessive socialism which adds up to multiples of the cost of those items you mentioned.

 

[Hamlet]

Quote from dddooo:

Sluggish private job growth indicates failure of tax cuts

If tax cuts have created jobs at all since 2001, it will have happened in the private sector. Assuming that job growth in 2006 matches the Bush Administration's projections, the economy will have added about 2.0 million jobs to the private sector from FY2001 through FY2006. But how many of these two million jobs actually can be attributed to tax cuts and how many to increased government spending—particularly increased defense spending—in this period?

Based on Defense Department estimates of the number of private-sector jobs created by its own spending, we project that additional defense spending will account for a 1.495 million gain in private sector jobs between FY2001 and FY2006. Furthermore, increases in non-defense discretionary spending since 2001 will have added yet another 1.325 million jobs in the private sector, for a total of 2.82 million jobs created by increased government spending. Increased mandatory government spending—which is not even included in these estimates or the accompanying chart—would account for even more job creation. The mere fact that the projected job growth resulting from increased defense and other government spending exceeds the actual number of jobs projected to be added to the economy through 2006 clearly indicates that the tax cuts hardly seem plausible as the engine of the modest job growth in the economy since 2001.
http://www.epi.org/content.cfm/webfeatures_snapshots_20060126

Tax cuts do stimulate the economy which in turn leads to the preservation and creation of jobs. Without tax cuts the economy was headed for a deeper more prolonged recession which would have resulted in less jobs.

 

[MYDemaray]

It is incumbent upon us as Americans to create our own jobs. It is not incumbent upon our government to do it for us. Asking the government to create jobs is like asking for one more handout.

Do tax cuts stimulate the economy? Perhaps -- but only when they are coupled with disciplined fiscal spending and a reduction in the federal budget.

Getting rid of tax cuts is not necessarily the answer. That's akin to telling a company like GM that's hemorrhaging money that it should do a secondary equity offering. Sure that would help pay down the debt, but it wouldn't make the company more productive. It's just a change in capital structure -- not a change in corporate performance. Now, shedding unproductive divisions and cutting money-losing business segments is an answer that's aimed at changing performance.

Government is an inherently inefficient allocator of capital and as such a smaller goverment is generally better for the economy. It doesn't matter how citizens fund it -- through debt (treasury bills and notes) or equity (taxes). The investing merits should always be separated from the financing structure. The investment merits of government should rest upon its ability to provide more efficiently and effectively goods and services that cannot be provided for or are not practically feasable in the private sector. It boils down to a utiltiy function. National defense, a national highway system, etc. -- all better provided by a single government entity than assembled like a piecemeal patchwork.

In the end it comes down to guns vs. butter -- simple as Econ 101.

 

[Warmagus]

How is taking money from productive citizens via taxes, pissing away half of it on a massive bureacracy, and then dishing out what's left over good for the economy?

I say more tax cuts, the federal government needs to go on a diet. Sure the government can create jobs via higher taxes, but in the long run you'll be passed up by countries who are smart enough to leave the private sector as free of encumbrance as possible. In my opinion that's the whole game, because everything the government hands out wouldn't be possible without the private sector to draw strength from.

 

[Smart Money]

Quote from dddooo:

That's because before you can own a car you have to be provided with roads, bridges, tunnels, DMVs, traffic lights and traffic cops, you have to be protected by the police against car thieves and uninsured motorists, NSA and FBI have to wiretap your communications to make sure you're not calling Osama, the military have to protect our borders against Iranian or Syrian invasion and fight "them" over there so that they don't come over here. What, did you expect all these services for free?

BTW You may want to consider leasing a used porsche, it's cheaper
http://smartcarfinder.com/used-cars/models/Porsche.html


Nobody is disagreeing with that but what does it have to do with the main point of the research that tax cuts did not create jobs?

Thats pretty funny the way you couched your counter-point because you're saying I've paid for all the infrastructure, so I have good roads to use it on, but still don't have my Porsche 356 to drive on them!

For the record...no...I don't have a problem with paying taxes for the things we need (like roads), and to help those in need. Everyone needs help now and then. I have a problem with government inefficiency and waste which drives our taxes up.

The original post, to me, looked like a thinly veiled political statement and it smelled like a Troll. So I took the troll bait and responded in kind. The argument that the taxes shouldn't have been lowered to create jobs is as stupid as the folks who believe that the creation of jobs was the reason taxes were lowered. It wasn't the reason, but an excuse to garner support for something that needed to be done. If our government realizes that raising taxes back to where they were makes folks unhappy, and further realizes that an expanding deficit makes us unhappy, then their only recourse is to do what they REALLY need to do...stop spending. Adopt a line item veto. Shine a spot light on pork projects. The end justifies the means, IMHO. You want a great economy? Leave more money in the hands of those who use it and invest it efficiently, rather than giving it to bureaucrats who gain prestige by how much they spend.

To the original poster: We've been advertising for an engineer in my firm for almost a year and finally resorted to training a newbie because we can't find an experienced one. It takes a long time (sometimes weeks) to fill our laborer positions because we don't get many applicants and most of the applicants can't pass the drug test. We now narrow our choice of prospective employees down to a few people and send them all to drug testing. Its more expensive that way, but it saves time and advertising costs. Here's a challenge: Name 3 people that you personally know who can't find a job after looking for a reasonable amount of time. Can you name dissatisfied workers? easily...most people don't like what they are doing or want more money...thats why they call it "work" and "capitalism". Want a better job and more money? Work harder, move to where there is work, get more education. Adapt and overcome. Then invest. It might not be a perfect system, but its one of the best in the world.

Worried about job exportation? What kind of car do you drive? What kind of television do you own? Japanese and Chinese? I admit I like german cars, so I know to keep quiet about it.

I think that any REAL economist, or arm chair economist, knows that the more money that remains in the pockets of a "spend everything you earn" economy goes for buying goods and services...some of which are provided by folks in the U.S.A....and admittedly some of them are produced overseas but sold by American retail staff. This creates jobs.

Thanks for the tip on the leasing thing, but I don't think you can lease a Porsche 356.

SM

 

[mmillar]

Quote from dddooo:

Sluggish private job growth indicates failure of tax cuts

I'm not American so I have no axe to grind here, but your conclusion doesn't follow from your data. Without tax cuts the 'actual change in jobs' could have been 0 (or it could have been 10 million). Take data, add personal bias, come to a random conclusion.

Just a quick glance at the 'Economic Policy Institute' website I think confirms bias in the author(s).