America, It’s Up to You - More Taxes or More Jobs?

By Gerard Lameiro

With the release of President’s Obama’s new budget, a critical debate has started to take place. What’s the best way to create new jobs and economic growth? Keynesian economists advocate increased government spending to create demand. Of course, with increased spending, typically comes much higher taxes. Some say that Obama’s new budget will result in $2T (Trillion!) dollars of new taxes over 10 years after a relatively small $150+B dollars in tax cuts is subtracted out. The proposed budget also calls for about $1.6T in deficit spending. New taxes represents “capital consumption” or the transfer of wealth away from the private sector to the government sector. This tax money is money that could have been employed by the economy more efficiently and with a much higher economic multiplier, if spent by the private sector (individuals and businesses). [more…]