Saying that the Obama “stimulus” was not big enough, conservatives are demanding that the government massively increase deficit spending to create badly-needed jobs. Newt Gingrich, at the conservative media outlet Human Events, calls for an Economic Freedom Act that includes,
• Reducing the payroll tax by half for 2010…;
• Eliminating the capital gains tax …;
• Reducing the corporate tax rate to 12.5% …;
• Permanently eliminating the death tax … ; [note – what he refers to as a “death tax” is an income tax on wealthy children – DJ]
Each of these huge tax cuts demanded by conservatives would greatly increase the deficit. Many other conservative organizations and politicians are joining this demand for massive deficit spending to create jobs.
In the article, Gingrich also criticized the size of the Obama stimulus because it did not create enough jobs, writing, “The Obama stimulus has clearly failed. It’s time to get back to what we know works for job creation. 2+2=4.”
Gingrich was right that the stimulus was insufficient. The CBO recently reported that the stimulus only put less than 2.8 million people to work, lowered the unemployment rate by less than 1.5% and boosted the GDP by less than 4.2%. The conservative-created job and recession crisis is much, much worse than that. We need emergency action to create 10 million jobs.
Tax cuts are the wrong approach because they would also reduce the country’s ability to maintain and modernize the infrastructure while increasing the problem of extreme concentration of wealth. Economists say that tax cuts are not effective at creating jobs (and create structural deficit problems), while directly creating jobs through infrastructure investment also leaves behind … infrastructure.