The End of Capitalism As We Know It
September 2, 2011 § Leave a comment
With new reports from the Labor Department, we experienced no job growth this past month. While pundits bicker whether or not we are in a technical recession, the job outlook remains quite grim.
No laws can be passed to bring America out of this hole. Is this the end of capitalism as we know it?
We had the $750 plus billion dollar stimulus pumped into the economy. Republicans, expectedly, bagged the President for it but pundits (mostly right-wing) and politicians ignore the fact that almost a third of the stimulus were tax cuts. In December, the President extend the Bush tax cuts and caught hell from the Democrats. In April he extended unemployment benefits, which, of course, he caught hell for from the right.
Pumping money, tax cuts, green jobs, regulation; looks like the President is playing both sides of the field. Still while being a centrist or, the word I like, a moderate liberal, the unemployment rate is at 9.1% (this number doesn’t count those who have gave up in the job search). 9.1% equals out to a whole 14 million Americans without a job.
Critics argue the stimulus did nothing and exemplified too much spending. Sure it’s not below 8% like he promised but it did undeniably help.
Even beginner economic students know supply and demand is the driving force of business. If there is no consumer demand, companies will not make, or simply lose, money resulting in layoffs and no new hiring. Corporate tax cuts and certain deregulations do not work and won’t encourage them to hire more workers, this only saves the corporation more money. Corporations are sitting on more money then they have in years.
Despite what former Massachusetts governor Mitt Romney says, corporations are not people and don’t need help, they are making record profits with fewer workers in the middle of a recession. Why would they hire more workers?
The key is consumer confidence, which is at its lowest since 2009. With the stimulus, families did the same thing corporations will do with their tax breaks: pocket the money. That is scary but it’s only smart in times like these. So while the stimulus works in theory, it failed in practice.
Like American families, the federal government is so tight for money, that there is a new issue regarding natural disaster aid.
Despite voting for an “emergency” $78 billion for the two unfunded wars, House Majority leader Eric Cantor declares we should have spending cuts to match spending, specifically for FEMA involving Hurricane Irene. The dilemma deals with whether or not FEMA should receive emergency (bypassing Congress appropriation) funding. The “E” in FEMA stands for emergency. Natural disaster victims do not have the time to wait for the constant bickering before receiving emergency funds.
The president is set to announce his long-awaited Jobs Plan speech on the 11th at 7ET. It is said to be filled with the same rhetoric: tax incentives for business, infrastructure spending, unemployment extension, etc.