Statistics Show Stimulus Package Results Have Gone From Bad to Worse

Bill Hedges of MO, you really should read the Moody's testimony to the government regarding the stimulus bill. Tax cuts are an incredibly inefficient way to stimulate the economy and create jobs. Ironically, one of the absolute best (and counter-intuitive) ways that studies have shown to stimulate the economy is to give more money (or benefits, same thing) to the unemployed.

When the average affluent American is given money by the government, history has shown that they generally either save it or invest it in an economic bubble, neither of which stimulates the economy. Money given to the unemployed or the poor, however, is immediately returned to the economy. People with money *may* want to create jobs, but everyone *needs* to eat. More people buying food creates jobs more surely than anything.

In numbers, for every dollar the government gives to the affluent, ~0.38 dollars of economic stimulus is generated. For every dollar given to the poor or the unemployed, ~1.70 dollars of economic stimulus is generated. Economic stimulus creates jobs, not money stagnating in the bank accounts of the affluent, and money spent on extravagances doesn't reach the pockets of the working class either. Unless, of course, you really think those yachts are built in the US.

How much further disproof do you need of the myth of "Trickle-Down" economics? It's a myth the rich are using their money to make into a truth because the only people it benefits are them. Look at our current situation - post-stimulus studies have shown that the stimulus money has wound up going disproportionately to the wealthiest Americans. Business stats show that layoffs are up, as are CEO salaries and bonuses, which some companies have been shown to pay for by laying off more employees.

After the stimulus, the affluent are out of the recession, but the middle class is still desperately struggling, the poor are worse off than they started, and the economy as a whole is still a total mess.

Temporary tax cuts, by the way, stimulate the economy by 1.02 dollars for every dollar spent. Making the Bush tax cuts permanent? ~0.35 dollars for every dollar spent.

The problem with the current tax system is that having high taxes in high tax brackets doesn't hurt small businesses. It hurts small businesses and small business owners that save or keep money they should be investing in their business. Under the Bush tax cuts, there is no tax incentive for any business execs to invest in their company to keep in a lower tax bracket. Such incentive, creatable with high tax brackets, gives companies a reason to create jobs. Right now, they spend less in taxes by not spending and not hiring. How the heck do the Bush tax cuts help people who want jobs?

Robert of MA 11:46AM December 20, 2010