Saturday, May 12, 2012

If It Isn’t Right, Do Nothing

Short Social Security income by cutting the payroll tax. Give small business incentives to hire more people. The logic in both cases is outrageously thin. Forty bucks a household a week will produce an avalanche of consumption producing vast job creation? Small gains, small purchases, and if we scan the stores, we see that such small commodities are mostly made overseas. Small businesses create most of the new jobs? True. They also lose the most of them when things turn down. Businesses hire when they need help—not because they get some tiny tax reward. The economy is not a precise instrument where pushing this lever will automatically get that result. Predictably. Do the right things—or do nothing. Stupid gestures just confuse.

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