Wednesday, December 23, 2009

The Policies of Job Destruction

There's a lot of talk about creating jobs and industries, but with the same breath the pundits proscribe punitive measures that drive jobs and industries away. Government is not good at creating jobs or industries directly. Small businesses are the job creators, industries must find the investment environment attractive.

When expectations of high taxes, and a burdensome environment ensue, jobs will not be created. Look at the punitive tax increases the health care bill imposes, Congress is working overtime to find ways to get money from wherever it can. The regulatory environmental burdens seem to be at an all time high, why would anyone build industrial capacity here in the United States when cap and trade is being talked about and building any sort of factory or manufacturing plant has to go through tons of hurdles? Of course R&D is leaving, why bother to employ researchers when an additional 8-10% will have to be paid thanks to the health care bill? Those who already provide health care know that the bill will only raise health care costs at a time when they need to cut costs? Better just to move to a country without these burdens, this is why a policy of seizing wealth only drives away wealth and destroys the economy. Obama is destroying any prospect of a good recovery with his tax and destroy policies.

Now if taxpayers were getting something valuable in return for all the government spending, then that would cancel out the negatives of higher taxes. But there has been no focus whatsoever on getting value for government spending. All we see is pork and more pork, nothing that makes it easier for employees to get to work faster or for goods to be transported cheaper and quicker. Foreign nations have their negatives too. India's infrastructure is horrible, getting around Mumbai is a nightmare, and China's regulatory environment is even worse for businesses, you never know when the government might turn on you and seize everything you've invested like Russia. That investors are still looking to move to these countries shows how bad it's gotten in the United States, that the advantages the US offers is no longer enough because of all the additional burdens just imposed by Obama. Those who want job growth and capital investment here must make it worthwhile. Businessmen aren't stupid, they must be able to predict future demand and future costs. Everyone can see that the current path the government is taking is unsustainable, and everyone can see that there is no desire to cut future government spending, the budget will have to be balanced by tax increases. Knowing that, it would be foolish to invest in the United States. Not only are the Bush tax cuts going to expire soon, which means a tax increase, but there are serious discussions over a VAT tax and increasing taxes further than the expiration of Bush's cuts will impose. Again, people must think from the prospective of an investor, why should he invest in the United States when there are better opportunities elsewhere? Anger simply makes no difference to the investor, you can be as angry as you want, I'll just take my money where people are happy to see me and my wealth.

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