The Republican "Jobs" Plan

How stupid does the Republican leadership believe Americans are?   If their recently announced jobs plan is any indication, plenty stupid.  The plan is nothing more than a rehash of the supply-side economics theory that for the better part of 30 years has failed to provide jobs and wage growth for the average citizen.  Their outdated laissez-faire assault on business regulations led directly to the greatest economic crisis since the Great Depression.  Their lower taxes for the wealthy results in more difficult lives for the not-so-wealthy and job losses for public service employees.  Frankly, the only thing this so-called job creation plan will do is make the wealthy wealthier and corporations more powerful. 

The economy is not recovering  quickly - but it is not the fault of "burdensome" regulations or high taxes.  The problem is that there is not enough demand for goods and services.  Demand is low because workers do not have jobs.  And supply-side economics is a proven non-starter for jobs creation. 

The Center for American Progress and the Economic Policy Institute in a 2008 report compared the impact of the 1981 Reagan tax cuts and the 2001 Bush tax cuts against the 1993 tax increase in Clinton's first year.  From the summary of that report we learn the following :

• Real investment growth after the tax increases of 1993 was much higher than after the tax cuts of 1981 and 2001. The yearly growth rate after 1993 was 10.2 percent versus 2.8 percent for the first supply-side era beginning in 1981, and 2.7 percent in the period of the second supply-side era beginning in 2001.
• Over the seven-year periods after each legislative action, average annual real GDP growth was 3.9 percent following 1993, 3.5 percent following 1981, and 2.5 percent following 2001.
• Average annual real median household income growth was greatest after the 1993 tax increases, at 2.0 percent annually compared to 1.4 percent after 1981 and 0.3 percent after 2001.
• Wage levels also did better after 1993. Average real hourly earnings following 1981 fell at an annual rate of 0.1 percent and following 2001 rose at a rate of only 0.3 percent. Following the 1993 tax increases average hourly earnings grew by 0.9 percent per year.
• Employment growth was weaker during the supply-side eras than during the post-1993 era. Average annual employment growth was 2.1 percent after 1981, 2.5 percent after 1993, and 0.6 percent after 2001.