Friday, January 8, 2010

Let's De-Stimulate!

Way back in June I called for recalling the Stimulus. It was poorly designed, and probably worse than just flushing the money down the toilet. Since then nothing good has come of it. Larry Kudlow today revives this notion, saying we should De-Stimulate. We've all had more than enough government intervention and taxes and wasteful spending. And who is Obama to decide that having the federal government spend $2.3 on Green Energy programs is better than letting the private sector do it? If it were so profitable and job-creating, surely some enterprising firm out there would already be pursuing this. Here's a slightly edited version of Larry's column:

After the arrival of a disappointing December jobs report, my thought on putting America back to work is simple: de-stimulate. Get rid of the Obama stimulus monster, including the government takeover of health care, cap-and-trade, and all this nonsensical talk of creating green jobs. Get rid of the increase in marginal personal tax rates and capital-gains tax rates. Get rid of the payroll tax hike from the health-care talks. Get rid of the spending that is a counterweight to growth. It’s creating so much uncertainty that even profitable businesses are afraid to hire new workers and expand.

On Friday, the day of the sub-par jobs release, President Obama comes out with a new green-jobs program that will cost taxpayers $2.3 billion. He predicts targeted tax credits for all of his faddish “energy savers” -- presumably determined by hoards of EPA bureaucrats -- will create 17,000 new jobs. This is out of a total workforce of 153 million.

And wait, it gets better. The average cost of these alleged new green jobs will be $135,000 per job. It’s sorta like the $780 billion stimulus plan, half of which has supposedly saved 1 million jobs at roughly $200,000 per job.

And on the subject of energy-related jobs, the EPA is now going to penalize manufacturing America -- or what’s left of it -- with tougher standards to reduce smog. Of course, smog has already fallen 25 percent in the last three decades. And the EPA’s projected smog savings are so miniscule compared to the new costs for business that the National Association of Manufacturers, the petrochemical makers, and others are screaming bloody murder.

Interior Secretary Ken Salazar recently announced that he is closing down federal lands for oil and gas drilling. This with the price of oil hovering around $83 a barrel and retail gas at the pump moving in the direction of $3 per gallon. Does anybody in Washington have any common sense at all?

Steve Moore of the Wall Street Journal just wrote a good column about tax chaos in the new year, with small-business write-offs for capital purchases expiring, the alternative minimum tax (AMT) un-indexed for inflation, and no fix in place for the estate tax, which is set to rocket from zero back to 55 percent.

So my point is this: Get rid of all this government spending, taxing, regulating, and meddling. De-stimulate. Let us keep our own money as workers, small-business owners, and corporate employees. Stop any future tax hikes. Stop them. And bring down business tax rates for large and small companies, from 40 percent (federal, state, and local) to something around 25 percent. And take a cue from FedEx CEO Fred Smith, who wants to revive the manufacturing and transportation industries with immediate cash-expensing tax write-offs for investment in new equipment.

President Obama has talked about a zero cap-gains tax for small investors. But why not provide more capital access for everybody, small- and large-business investors?

In light of all the tax-and-regulatory threats, it’s too expensive to hire right now. So get rid of all the so-called stimulus plans and social policies to transform the government’s relation to the private economy. Remove these obstacles.

The economy has more than enough monetary stimulus, and corporations are profitable. The stock market rose nearly 3 percent in the first week of the new year, and is up 70 percent from the March 2009 low. The recession is over. But America must go back to work to truly get the country moving again. Unfortunately, Washington is standing in the way.

There’s a populist wave coming, but it’s from the right, not the left. Free-market populism emanating from the tea-party movement wants government out of our businesses and out of our pockets. These folks are right.

Right now, Washington is completely wrong.


W.E. Heasley said...

Of course! The Spruce Goose of all stimulus plans ever concocted needs followed up by a 2.3 Billion dollar Ford Edsel!

2010, the 6th year of the Carter Administration and the unfinished business of the Nixon Administration.

alstry said...


How much of Government tax receipts come from simply from government spending?

Federal Government tax receipts are about $2.2 Trillion dollars vs. Federal Spend of about $3.6 Trillion.

For fun, let's assume a 30% gross tax rate including FICA on $1.4 Trillion dollars of salaries created by ONLY the Federal is evident that a significant part of Federal tax receipts is simply a product of Federal spending.

Could it be argued, if there was no stimulous or deficit, Federal tax receipts would be much lower?

Игры рынка said...
This comment has been removed by the author.
Игры рынка said...

this sentence alone is enough to show what non-sense they are talking about. They are simply monkeys and do not have even foggiest clue about the topic

"Get rid of the spending that is a counterweight to growth"

Spending IS GDP. Net government spending (read deficit) IS by definition GDP growth. Respectively government surplus is by definition counterweight to growth. Does he then mean that US needs higher deficits?

Enough? Or do they claim that private sector spending is a more efficient type of spending? Is this whole crisis not enough for those Nobel prize-winners from Chicago to understand how ridiculous their theories are?

So I could not read beyond the 1st paragraph. And all people should have done the same with this intellectual waste

Brian H said...

For big government politicians, its not about the economy or growth or jobs or health care - its about converting voters into dependents.

Benjamin Cole said...

"There’s a populist wave coming, but it’s from the right, not the left. Free-market populism emanating from the tea-party movement wants government out of our businesses and out of our pockets. These folks are right. "

Well, I will believe that, when the Tea Party absolutely, unequivocally demands a complete and immediate end to the Department of Agriculture, and its subsidization, extensive and intensive regulation, and near total domination of the agriculture and rural sectors of the US economy.

Someohow, I doubt this tidal wave of freeing up the ag sector is coming from the right wing.

I wish it would, I wish it could.

MadTax said...

As long as the Tea Parties continue to have a Christian fundamentalist ingredient (or any religious ingredient for that matter.) They will not be successful.

That stuff needs to be exorcised.

Scott Grannis said...

Daniel: I agree. The successful Tea Party platform is likely to focus on a conservative fiscal agenda, minimizing the role of a social agenda.

Public Library said...

I agree with Benjamin. This is a one-sided slap at what is wrong in this country.

We have equal if not worse waste in agg, defense, and pork floating around in this country. Yet nary a peep from these so-called Tea-Party anti government populists.

Kind of a joke if you ask me. Where were these folks when GWB was pumping out stimulus 1 and 2. Probably standing in line waiting for the handouts.

Scott Grannis said...

I think that those in the Tea Party movement would probably all agree that the Republicans have done a terrible job over the years. No one would defend the Bush adminstration's spending record, and I surely wouldn't. I'm an equal opportunity critic of any politician who isn't in favor of drastically reducing the size of government across the board.