September 19, 2011

Bad Logic

Yesterday morning as I flipped through the channels, I heard Senator Lindsey Graham expound the Republican talking points on why raising taxes to pay for infrastructure repairs won't fix the unemployment problem. See, it may work in the short run, but it won't work in the long run. Here's why he's wrong.

Right now we're in danger of a double dip recession because of high unemployment, which feeds low consumer confidence. Low consumer confidence means we aren't spending enough money to cause businesses to hire new employees.

Regardless of how "short term" the results might be in terms of hiring people to rebuild our quite literally crumbling infrastructure, all those newly working people would lower the unemployment rate. They would be paid real money, which they would then spend, pumping money into the economy. The result of lowering unemployment for a period of several years and the accompanying pumping of money into the economy would undoubtedly raise consumer confidence, which would pump more money into the economy, raising the demand for goods and services, thereby giving business more reason to expand their businesses.

And that, my friends, is the "long term."

1 comment:

Anonymous said...

Please learn some economics- and understand what the businessperson faces instead of thinking in abstract concerns. IF you really want to learn where we are at in this economy- you will give these videos a real hearing: