Examiner Editorial: The fuzzy logic underlying Obama’s stimulus plan

President-elect Barack Obama and his advisors are playing word games on their proposal to “save or create 3 million to 4 million jobs.” The promise’s very vagueness renders it meaningless and calls into question the credibility of the $825 billion Democratic “economic stimulus” package, which is inextricably linked to the jobs pledge.

There is no way to define when an existing job has been “saved.” How does anybody measure jobs that aren’t lost? If 145 million Americans have jobs one month, and 145 million are working the next month, which of those 145 million will Obama count as having been “saved”? All of them? What if only 144 million jobs are left: Will any of those 144 million be counted as “saved” even though the overall economy lost one million?

In truth, a free economy continually creates and destroys millions of jobs whether there is economic growth or contraction. What matters is the net job growth or loss: If the buggy industry loses a million jobs, but the auto industry adds two million, the economy obviously is better off, although none of the buggy jobs were “saved.”

That’s the basic logic that inspired the IRS to balk at what had been a key component of Obama’s stimulus plan, a proposal to provide a $3,000 tax credit for every job “saved or created.” According to Fox News, “the IRS has told previous Congresses that the idea could not be drafted into law because it would be impossible to know which jobs were saved and which were created.”

In a related word game on the jobs issue, Obama says 10 percent of the “3 million to 4 million jobs” up to 400,000 positions will be government employees. Obama and his team should read Randall O’Toole’s “Best-Laid Plans: How government planning harms your quality of life, your pocketbook and your future.” Hopefully, they will then understand why 400,000 new bureaucrats consuming billions more tax dollars to create page after page of burdensome and costly red tape telling the rest of us how to live is the last thing America needs.  

There is a better way. Reps. Tom Price, R-Ga., Jim Jordan, R-Ohio, and Scott Garrett, R-N.J., offered a bill with across-the-board income tax cuts of 5 percent, a top corporate tax rate of 25 percent (down from 35 percent) and greater tax deductions for interest on student loans. That’s the right general approach. Let all Americans keep more of the money they earn, then stand back and watch their prosperity grow. Tax cuts worked during the Kennedy, Reagan and Clinton years, and they will work for Obama, too.