Yeah, sure, I'd prefer that the president's jobs bill focus more directly on creating jobs—actually hiring people to build and repair things like roads, bridges, schools, drinking and waste water pipes, and other stuff we need. Just seems kinda obvious, really.
But, you know, John Maynard Keynes is dead, slain apparently by Milton Friedman in an epic battle of economic titans that left the world safe for unfettered free market capitalism. Or something. I think I read it in a graphic novel. Soon to be a major motion picture.
So that said, if the only acceptable political tool for incentivizing job creation is tax cuts, and reviving consumer spending is the key to reviving the economy (and thus hiring), then why not just go all the way and slash taxes on the middle class and the working poor, offsetting the lost revenues by—wait for it—raising taxes on the wealthy?
Think about it. The problem can't possibly be that the ultra-wealthy don't have enough money. They have gobs of it. More, as a percentage of the economy, than ever before. And yet they're still not investing in job creation, nor could they possibly spend it fast enough if they wanted to, to make a meaningful dent in consumer spending. (I mean, how many crystal Chihuly guitars does Paul Allen have to shatter before he just gets bored?) One person can only consume so much, and there just aren't enough rich people to make much of a difference.
But working and middle class Americans... well... that's almost all of us. And I can assure you that if you give me a couple thousand dollars in extra take-home pay, I'm damn well spending it... on car repairs, home maintenance, a new pair of comfy shoes, maybe a nice meal out, and all of the other goods and services that the wealthy people sell. And once we're buying their stuff again, they'll have no choice but to hire people to make more it, who will then spend their money on buying even more stuff, and so on, and so on until before you know it, unemployment is comfortably below six percent once again.
We all benefit. A rising tide lifts all yachts, and all that. Think of it as trickle up economics.
And here's the funny thing: My economic prescription? Given the prevailing, market-oriented, Miltonesque economic theory, it's not in the least bit crazy. The exact same economic principles that predict slashing taxes on the wealthy will spur economic growth, also predict that slashing taxes on the working and middle classes will do the same, perhaps even more efficiently. Honestly. There's no data or theory to suggest that lavishing such tax breaks on the wealthy is somehow more stimulative. They just have better PR.
Again, if the goal is job creation, I'd still prefer spending the money hiring people to make things we need. But if the only bolt in our policy quiver is tax cuts, and anemic consumer spending is a big chunk of the problem, wouldn't it make more sense to put money in the pockets of those who actually need it?