Jim makes $500 a month after taxes like Social Security, Medicare, and this withholding junk. So Senator Bob wants to give tax cuts to stimulate the economy because it will give Jim more money in his pocket each month and the company he works for more liquidity to either create a job or give Jim a raise. Here's the thing: It doesn't work out that way. Jim will most likely see that he's getting more money, let's say $550 a month. He's gonna use that new $50 a month and save it, or keep it for a rainy day, because he's been getting by for $500. Sure he could use it for other things, like a special dinner or something, but most likely he'll keep it. The buck stops in his pocket, literally. Now his company will most likely not give Jim a raise and will most likely not create a job with the extra money after it pays it's taxes. If it were me, I'd use it for the bottom line, as basically as a means to increase that bottom line. Why spend more money in payroll when I can use the tax breaks to increase my monthly, quarterly and annual profits? See where tax cuts are taking us? Relatively nowhere. Have we spent or created a job? No, we haven't, and we've lessened the revenue of the country and programs that definitely need funding.
Now to the all important title of the post. Who guarantee's the money in the United States? Well, that'd be the government! So, if we give the government the right to use that money, we can be sure it's going to be spent, right? Right, because it's is guaranteed. It may be slow, but the money will be spent. Some sooner than later, but if it is things like INFRASTRUCTURE, then jobs will be most definitely created, even if they aren't skilled jobs. We've got enough building requirements and codes to make it possible for unskilled labor to lend a hand in roads, bridges, and levies. Lets' go back to Jim. Lets' say he works for a construction company. His company wins a bid to upgrade the nearby bridge, but the job is too big for the company's current workforce. So what do they do? Bring in a bunch of new workers for an extended period of time. And the government won't fuck around paying the construction company because it was guaranteed payment.
Simple demand side economics. Something is wanted and needed, and therefore stimulating. It requires spending and not cutting, which would be supply side economics. If consumers are consuming, why should producers produce? And if producers are producing, workers aren't working. What do we have now? Massive layoffs from all sectors of the economy. It doesn't seem like supply side economics are working. Spending is the answer in this case, I promise. If it doesn't work, then you can come by and say "I told you so".
Tax cuts haven't worked for years, the last 8 to be exact, and so we must do something different. The only thing left is spending, and albeit there is some spending in the current bill that's weird and ridiculous, but it is NEEDED.
Here's Rachel Maddow using clips from the Senate from the last couple of days explaining exactly what I've said above, but perhaps a little more eloquently:
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And then a great motivational picture on the need for infrastructure spending:
