What Comes First: The Chicken or the Egg?

We believe abolishing the double-taxation that is inherent in the corporate tax code would open America up to a massive expansion of investment and job creation unlike any we have seen since the internet boom of the 90’s. Or perhaps the industrial boom that followed WWII as the US rebuilt the economies of the entire world in essence.

The industrial boom did not follow WWII. Rather, WWII was in itself the origin of the "industrial boom" as the United States mobilized to build thousands of ships, tens of thousands of airplanes, jeeps, tanks, armored personnel carriers, landing craft, and untold millions of bombs and bullets. The challenge for policy makers following WWII was to transition back to a peacetime economy, maintaining prosperity, and integrating hundreds of thousands of returning veterans into the industrial workforce.

World War II is the best evidence in support of Keynesian government stimulus to spur employment. The GI Bill, Marshall Plan, and a few years later the Defense Interstate Highway System kept the Keynesian stimulus going, even in the face of a highest marginal income tax rate of 90%.

The bottom line is that businesses don't hire unless there is demand for the goods and services they produce. Period. With near record profits and unprecedented cash reserves, businesses seem to be content with declining sales.

but at what a terrible cost!

We don't want to step up the Wars in Iraq and Afghanistan to pull us out of this accursed recession do we?

Businesses are 'content' to slash costs and workers and many are making more profits now than before the recession as a result. There are still some basic demands of food, energy and shelter people have to have under any circumstances and companies that provide such services are content to do it with a lower number of workers.

But no business seems to be willing to invest in more workers and costly new plant and equipment investments with the spectre of higher taxes and imposed costs staring them in the face, with Obamacare for example, until they feel confident that they can make a profit over and above what the marginal costs are to make any new product or service. Until they do, it is doubtful that we will see a whole heckuva lot lower unemployment rates.

There's tons of 'demand' for near-about everything....but that doesn't completely translate into more employment until the private sector kicks in.

Unless you are advocating another WWIII in which case we might have to start importing people from Mexico and Latin America and giving them visas at the border to come work here in the defense industry.....

We don't want to step up the Wars in Iraq and Afghanistan to pull us out of this accursed recession do we?

Absolutely not! That's why we need the ultimate Keynesian investments in rail and mass transit and large-scale alternative energy and repairing crumbling highways and bridges. GDP started to grow in 1937 or so, but the "conservatives" got scared of the "deficit" and persuaded the Congress to implement austerity measures and balance the budget. The rest is, as they say, history.

There's tons of 'demand' for near-about everything....

Well there's tons of "wishes" for near-about everything, but "demand" is wish plus ability to buy. The "private sector" is not going to invest in "new products or services" when there is no demand.

That's why, as I said earlier, we need the ultimate Keynesian investments to put hundreds of thousands of construction workers and laborers back to work, putting money in their pockets, resulting in demand for consumer goods instead of wishes and window-shopping.

but relying on infrastructure projects and WPA-style programs to get this economy back to full speed again is not the optimal way to do it, in my humble opinion.

The American worker and entrepreneur are smart enough to find new products and niches to exploit if they are not constrained in some way such as they appear to be so now with higher taxes and ObamaCare looming on the horizon.

That coupled with incredibly tight lending standards (much of which was needed, granted) has put the brakes on the economy and it might be years before it feels like we are out of this slowdown.

I wish I could agree with you that it is the most efficient, productive and cost-effective way of doing things, I really do.

But after 22 years of working in and closely outside of the federal government in Washington, DC, and reading the 2400-page federal budget backwards and forwards at least 4 times, I just don't see it.

Sorry about that.

I guess that is the yin and yang of American politics and has been since the founding. Without those stark differences, we might not have anything to talk about.

It gets boring talking to people you agree with all the time, doesn't it?

They didn't read the legislation either!

Nothing is beneath me as a result I am afraid.

a little humor every now and then leavens the discussions. Without it, politics is just too contentious and silly and nasty.