I have seen a tweet that extended jobless benefits are about to end for about 2 million out of work Americans. I feel for these people, having been there myself. The problem is that Congress will now debate on extending these benefits again. What these people really need is a job.
As a reminder, the government can only employ people. It can not create private-sector jobs. Governments at all levels can, and should, foster an environment where jobs can emerge. And there are steps to do this. I may not list them all, if you have additions, please comment. And no, lowering taxes in and of itself does not create jobs because you have little control over what people do with the extra money. But it can lead to job creation depending on how that extra money is used.
Some things that can more effectively foster an environment where more jobs are availible.
1. Do not make business the enemy of government. Government and business should be partners. I know that this ruffles certain feathers, but that is how it works. When business succeed, there are more people employed and less demand for government services. Then government can cut spending and raise taxes. This is how Reaganomics works. It is not just about arbitrary tax cuts, it is about incentivizing people who have money to invest it well.
2. Provide a clear direction. Show commerce that you care about business and about watching them grow. You can't talk about supporting business one day, and then putting onerous and confusing regulation on them the next. Words are supported by actions.
3. Foster demand. This is where tax cuts can play a role. There are three things that people can do with those tax refund checks. Spend them, pay debts with them or invest them. Is either bad? Spending leads to more jobs. Payment of debt and investment lead to more money in the bank for business to borrow from and lower interest rates.
4. Encourage entrepreneurs. All large businesses had a start somewhere. One person with an idea. Governments should help these ideas take root. We forgot that recently. Make 2011 the year of the small business. Any company that registers in 2011 should get a break for federal taxes for five years or when revenues reach 2,000,000 per year, whichever comes first. That would be my tax cut.
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