Something I’ve been thinking about lately is this whole debate of Tax Cuts versus Paid Projects. Which are going to stimulate the economy more, which are better to get our country back on track, etc.

Republicans keep saying that if we give tax cuts to small businesses, then those small business will then have more money to hire new employees.

When you write that out – it reads really well. Makes some sense. But think about this – We are in one of the WORST economic times in our history. MANY businesses are barely on the cusp of surviving, much less making an actual profit. So put yourself in the shoes of a small business owner.

Over the last year, you’ve stopped making as much money. Not nearly as much profit has come in to re-invest into the company, pay suppliers, pay bills, etc. Labor is the NUMBER ONE expense for most employers, especially small businesses. So maybe you’ve laid off a few employees already, even though you didn’t want to. The government decides to give your business a nice tax-break. You’ve got extra money coming back into the company for the first time in 6 months to a year. What are you going to do with that money?

Are you going to turn around and IMMEDIATELY hire another employee? Another salary to pay. Another benefits package to pay. Another person to put on your workers compensation insurance?

Or are you going go to pay bills? Pay creditors? Pay your own salary? Keep it in the bank because things aren’t getting better yet and you realize that if things continue to go south, that extra money could keep the current slate of employees you have already on board paid and part of your labor force?

You’re going to do the latter. You’re going to do push the status quo, because in this instance, that’s not a bad thing. At least not for your company.

This is why I think tax cuts aren’t going to do diddily squat to help stimulate the economy. They aren’t going to create new jobs, they aren’t going to create a huge amount of spending into the economy, they aren’t going to move us forward. They’re going to hold the line. While I do think there’s something to be said for keeping things from getting worse, how long can that last if we don’t actually get new jobs going? New buying happening? People back to work at new jobs, so they can buy new things, which will be better for your company in the first place, because that allows real growth versus status quo thinking.

A spending bill IS what we need. We need to get all the infrastructure projects going we can. All of the public works projects we can. Nothing else is more important. We need to get people back into paying jobs, so they buy the goods all these small business manufacture or employ the services they offer. And, because we’re actually doing public works projects, we’re killing two birds with one stone – because we’re fixing things that need to be fixed as well.

We’re fixing our bridges. We’re fixing our roads. We’re getting municipalities online. We’re getting rural areas better powerlines or internet coverage, so they can stay tapped into the world and potentially open new jobs and resources for themselves in ways we haven’t thought of yet.

DO NOT BUY INTO the erroneous concept that tax cuts are going to solve this at all. I wish we could fix this situation without government spending more money, getting into more debt. No one likes spending – not Democrats, not Republicans – when we’re already in debt. But the government has the opportunity to try something and change something, get something going.

You may fundamentally disagree with me – that’s fine. You may think that it’s a bad idea to spend money in an economy that’s having trouble – that’s fine. But don’t try and tell me that giving tax cuts to ANYONE is going to get the economy going in the right direction. Unemployed people don’t get those tax breaks, so they stay unemployed and a drain on the system. Middle class people get some extra money, and they keep it to themselves, put it in the bank, in case they get laid off and can’t find another job, so they’ll have a safety net. Small business will do the same thing.

Tax cuts alone or in majority in comparison to spending will not turn anything around. I’m sorry.