What Creates Jobs?

July 13, 2011 at 10:27 am

Tax cuts, less taxes, lower taxes.

That’s all you hear conservatives talking about these days.

What we should be asking is: What creates jobs?

Put yourself in the position of a business owner for a second.

Let’s say you’re given a sum of money in the form of a tax cut. What determines whether you use this money to create a job?

The answer is: You hire more people if there is more demand. Otherwise, you save the money or invest it somewhere else.

Maybe you spend it trying to achieve some cost savings (which by the way, might help you eliminate jobs). But you don’t hire more people unless there is more demand.

To summarize: Demand creates jobs. 

It’s Economics 101.

So why the #@^)*&$#% are we spending so much time arguing about reducing taxes?

Every progressive in the country should be giving this short stump speech and calling for demand stimulation.  When we have more demand, we will have more jobs.

We’ve tried supply-side economics for the past 30 years and we’ve gone too far in that direction. What we need now is “demand-side economics“.