Do Democrats Understand How An Economy Works?

I was hoping to go with a bit of lighter fare, a funny story about a guy bringing a barstool to a gunfight (guess who wins), alas, two other stories caught my eye, and highlight how clueless and inept Democrats are regarding jobs and the economy. Let’s start with The Cluelessness Of Obama

President Obama unveiled plans Thursday to double U.S. exports over the next five years in hopes of spurring job growth, an ambitious goal that may rekindle the battle over free-trade policy.

The president acknowledged the formidable barriers to his goal: doubts in Congress over new free-trade agreements, misaligned currencies that make Chinese products cheaper on global markets, and continued weakness in global demand, all problems that could dwarf efforts to promote U.S. products and services abroad.

But, Obama said in a speech, “in a time when millions of Americans are out of work, boosting our exports is a short-term imperative.”

Pretty speech. Interesting idea. The only problem is, people have to be actually, you know, employed and producing products first. You can’t double exports on products not being produced.

Next up, we have the Senate’s $149 billion jobs bill (wait, didn’t we have one of those in February 2009?), which does virtually everything that doesn’t actually create jobs. It has plenty of tax breaks, but, not the kind that actually stimulate jobs production, as well as

  • Extending unemployment benefits to Americans out of work for more than a year, providing for a total of up to 99 weeks in most states.
  • Offering subsidies for unemployed workers in an effort to help pay for employer-sponsored health insurance.
  • Adding an individual income tax deduction for sales and property taxes, and a business tax credit for research and development.
  • Extending a variety of energy and alternative fuel tax credits.
  • $1.5 billion to help farmers affected by heavy rains, floods and other weather-related disasters.

There are primarily, at the top end, three ways government can stimulate a decrease in unemployment

  1. Put them on the government payroll (which is what we have primarily seen with Stimulus, and a good chunk of those jobs were temporary or “saved”
  2. Providing long term tax incentives/breaks
  3. Companies have confidence in what the government is doing

Even if the tax breaks were perfect, targeted, and long term, there are so many worries about what government will do in the future, companies are staying in a “wait and see” mode. Cap and tax, health system change, a potential for increased taxes, illegal immigration reform, you name it, companies are unsure what will happen. No one wants to hire someone they will not be able to potentially afford. Without confidence, unemployment will remain high.

Other tax breaks in the bill include a deduction for college tuition for couples making less than $160,000 a year, and one for teachers who use their own money to buy school supplies.

That helps the unemployed get a job how, exactly?

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