Jobs and targeted tax cuts as economic stimulus

President Obama’s weekly address focuses on growing private sector jobs and the use of strategic tax cuts aimed at the middle class, and small business, to grow the economy. It’s working, and the Republicans aren’t happy.

Firstly, on jobs…

We need to keep this growth going and strengthen it. That’s why we’ve been fighting to pass a series of jobs bills through Congress – bills that independent economists say will create more jobs and grow the economy even faster. Because now is the time to step on the gas, not slam on the brakes.

One of the most insulting aspects of conservative attacks on welfare is that they see it in isolation. New Zealand’s economy contracted and hasn’t recovered. The unemployment rate has continued to rise. This isn’t because the Nats have made welfare more appealing – far from it. The issue is they are not creating enough private sector jobs.

You see, last year, both parties came together to cut payroll taxes for the typical middle-class family by about $1,000. But that tax cut is set to expire at the end of this month. If that happens, that same family will see its taxes go up by $1,000. We can’t let that happen. In fact, I think we should cut taxes on working families and small business owners even more.

Tell them not to vote to raise taxes on working Americans during the holidays. Tell them to put country before party. Put money back in the pockets of working Americans. Pass these tax cuts.

This sort of counter-cyclical economic stimulus works. The Rudd Government in Australia were even less targeted, with a massive cash injection into the economy by giving $800 to every Australian. Tax cuts targeted at the lower end gives money directly to people who will spend 100% of it. It’s not going to go overseas in investments, and it’s unlikely to be used on luxury products. It will go straight back into the local economy.

The answer to welfare problems is not to mess around the edges trying to look tough on the issue. The answer is to create jobs for these people to go to.

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