Here is the President’s speech that he gave a few moments ago at noon on August 3, 2012. There is also an article Extending Middle Class Tax Cuts for 98% of Americans and 97% of Small Businesses.
Rebuilding our economy starts with strengthening the middle class. Extending tax breaks on 98 percent of families now would give hard working Americans the security and confidence they need.
He noted something that I have been sharing ever since I saw the comment on the web. The tax cut on the first $250,000 of income is for everyone, not just the middle-class. That means you can make considerably more than $250,000 and your tax bill would still be lower than it would if we let all the Bush tax cuts expire.
The President failed to point out that tax cuts for the ultra-wealthy to invest in non-productive financial derivatives actually hurts the economy. Some of these people would be job creators during more normal times. With the middle-class under financial pressure, there is no reason for the wealthy to create jobs now. There aren’t enough customers for the people who already have jobs.
It is anticipation or the actual appearance of more customers in the economy that drives job creation. Otherwise the “job creators” just park their money in these financial derivatives until they see an uptick in the economy. It is middle-class behavior that spurs the “job creators” to create the jobs.
At the moment, it is not high taxes and it is not regulation that keeps jobs from being created. At the moment it is solely a lack of demand from the middle-class.
This is to say that at some other moment in the future, the factors that the Republicans keep harping on may be relevant. We should only be so lucky. We will never get to that happy moment when taxes and regulation are holding back the economy if we never get the economy moving in the first place. I say that will be a happy moment, because high taxes and over-regulation are problems that the Congress has the power to solve.