Rick Manning, Americans for Limited Government:
How could someone seemingly get everything they touch wrong? You would think proposing tax cuts would be safe territory for our incumbent president, until you examine his actual proposed cuts.
President Obama is expected to announce a $200 billion two year tax cut for business to encourage them to move up their capital expenditures and stimulate the economy through their purchases — essentially applying the “cash for clunkers” car sales economic model to capital spending by business.
Some would ask what is wrong with a business tax cut that purports to stimulate the economy? It sounds almost Republican.
The answer is at least three fold.
1. This tax cut just like the grants and spending from the stimulus package, attempts to pick winners and losers favoring businesses with heavy capital expenditure outlays like the U.S. government-owned General Motors, or the UAW-owned Chrysler Corporation, over service-oriented businesses who will derive little if any benefit.
2. The two year nature of the tax cut will naturally push capital spending, which might occur in 2013 or beyond into 2011 and 2012, leaving a capital expenditure void in 2013, harming the economy over the long haul. We saw this exact effect with the cash for clunkers program, and more recently with the mortgage incentive program. When they ended, both car and home sales went off a cliff. Of course, the fact that the President faces reelection in 2012 and someone else is likely have to deal with the mess in 2013 has nothing to do with the length of the proposed cuts.
3. It effectively penalizes other businesses in their quest for capital as they are forced to pay what is likely to become the highest corporate tax rate in the industrialized world. (Japan is currently in the process of lowering their corporate tax rate which would leave the U.S. with the highest rate.)
If this Administration wants to get the economy going, the answer is not directed tax cuts on expenses or research and development tax credits, but instead a lowered across the board tax rate, and maintaining the lower capital gains tax rates put in place under President Bush’s watch.
Instead, the Obama Administration cannot help their basic instinct to attempt to engage in top-down, command-and-control economic policy. For whatever reason, this Administration does not seem to comprehend Adam Smith’s invisible hand, which describes how the profit motive causes a series of decisions throughout the economy that results in natural winners and losers based upon the merit of their ideas, the value of their products and their drive to succeed.
Free enterprise works, but gaming the system in favor of some companies over others ultimately creates failure as the favored businesses become dependent upon taxpayer largesse rather than developing products that can compete and win in the marketplace.
[…]
[…] the more level the playing field, the less dependent our nation is on government “doing something” and that may not sit well with an Administration that honestly seems to believe that they are the masters of the universe.
Ultimately, this power hungry drive to control the economy and attempt to defy Adam Smith’s economic laws, show that even when announcing support for cutting taxes, Obama just doesn’t get it.
Or, more likely, he gets it just fine — and even this directed tax cut is nothing more than a vote buy scheme proposed by a king whose court feels put upon by the increasing ingratitude of the commoners.
I’ve long since stopped believing that mere incompetency by the progressives is what is destroying the economy: the sheer magnitude of the supposed incompetency exhibited by ObamaCo suggests that something more sinister is at work here, that — to paraphrase Hannibal Lecter, as he strove cryptically to direct Clarice Starling’s understanding of Buffalo Bill — this Administration’s random scattering of policy moves seems almost too desperately random, like the elaborations of a bad liar.
This is no different. Just as Obama thought of his intervention in the auto market as a political calculation, this move has less to do with helping the economy than it does with appearing to be helping, in order to win back over those Obama knows desperately want to believe in Hope and Change.
Will it work? With many, likely it will — especially if a feckless GOP leadership, following what is its now established game plan, does nothing but sit by and wait its turn at the trough.
It isn’t enough to defeat Obama and his quasi-Marxist agenda. Those Republicans who’ve learned that they can appear “conservative” simply by remaining to the right of the far left — all while enjoying their turn at the government spigot — need to be sent packing, too.
Otherwise, we’ll have exchanged calls for “social justice” with calls for “compassionate conservatism” that amount to little more than a variation on a theme.
FROTUS knows absolutely nothing about economics. He’s proven that time and time again. Every time he claims that small businesses can’t get loans, he proves again that he is an economic retard. So he’s being run by a cabal, if you will, of people betting on his personal popularity and melanin advantage, to push through this economy-destroying agenda.
Boehner needs to pour it on and say something like “Now that every Obama economic policy has turned to crap, the Republicans will be the protectors of the American people’s money and continue to be the party of HELL NO!”
a feckless GOP leadership, following what is its now established game plan, does nothing but sit by and wait its turn at the trough.
when they re-elect the Boehnerfag McConnell leadership what blew it last time they had the majority you will know how truly and irrevocably fucked we really are.
Should they refrain then a soupcon of feelings of hope and change might will be justified. Maybe.
Even Barry’s idea of “tax cuts” are a poison pill.
I agree with Jeff, this is not incompetence, it’s vandalism.
Keep that up, Jeff, and you’ll be fired from your own blog.
-Signed, Rote Redstater.
That’s a fair point, moneymen. However, not a lot of businesses are going to hang out “help wanted” signs knowing that the funds for those jobs are going to dry up in 3 years. They might contact temp agencies and the like, including the overseas types of temp agencies, but hiring long-term domestic labor, not so much. So for stabilizing the jobs market, this is kinda fail. The Bush tax cuts at least lasted 8 years, enough time for a business to justify hires on the notion that the business could potentially expand to the point that a tax increase could be offset by generally increased revenue.
3 years? Not so much.
Yeah. I really wish that there wasn’t quite so much hemming and hawing and navel gazing among the GOP congresscritters about the whole Paul Ryan fiscal plan.
Our elected “leaders” only lead to where we’ll follow. That’s doubly true of the leadership.
word:
This is no different. Just as Obama thought of his intervention in the auto market as a political calculation, this move has less to do with helping the economy than it does with appearing to be helping, in order to win back over those Obama knows desperately want to believe in Hope and Change.
Word.
Of course, the irony being that he’s taking a position that represents the exact opposite of what he wanted in order to win votes. Some folks would ponder that. Not him.
Cash for capital expenditures for 2 years, cash for clunkers writ large. What could go wrong?
Hush, meya. How many times have you been banned, under how many names? Get help.
Is there something about the plan that makes it not really a plan?
Just so you know, when the economy crashes, you can’t get out of financial trouble by changing the name you use to comment on blogs.
You’re welcome.
When did it become the government’s job to use the unused capacity in our economy? Nevermind, you are a lying disingenuous little twat.
Time to ban some more.
For what it’s worth, if it’s fair and interesting discourse you’re after, Patterico is unbanning everyone he’s ever banned as a way to show his beneficence. Including trolls like, for instance, me — whose despicable insistence on arguing my position led me to be banned yet again, evidently, without my having known about it.
No worries. Amnesty is here. Maybe you should head over there and bother the conservative pragmatists for a bit. They’ll be very supportive of your right to dissent. Provided you do so in approved language.
Me, I don’t much give a shit what you think — and you aren’t dissenting, or discussing. You’re trolling.
Life is too short.
Thank you.
Lots, given the amount of unused capacity we have now.
“unused capacity” – that’s a hoot, really. Companies are sitting on cash BECAUSE THEY’RE AFRAID OF WHAT THE GOVERNMENT WILL DO NEXT. Companies are trying to stay safe and stay in business. Because, you know, going belly up is bad for everyone.
going belly up is bad for everyone.
Well everyone except Obama. With 10 bil in a Swiss bank account, I’m sure he’ll survive.
your Associated Press propaganda squad wraps up the Narrative with a little bow
“The WH issued a statement a little while ago, saying the President will shortly make some announcements that will bring an exciting new phase to the economy”
– Drop your cocks, and grab your sox.
“exciting new phase to the economy.”
I’m all tingly with anticipation at increasing the rate at which we speed towards our destruction.
– Hillery today: “We need to get things back on track economically at home. This sort of international debt is making us look weak in the eyes of the world.”
– Question is, are her recent statements condoned by the WH, or is this her first degree of separation for a 2012 run?
Kristol is attempting to hang onto his native optimism. I can’t help but to wish him success:
Jeff, I never was one much for amnesty – methinks I’ll just stay here at skip any visits to Amnestyland.
Meh. What good is amnesty if you use back channels to trash people anyway?
Many people who consider themselves good men aren’t. And many people who appear assholes are really good men.
Life is filled with such amazing oddities!